Same-Sex Divorce: The Difficulties of Nonrecognition
Divorce is difficult for any couple, but same-sex spouses face divorce headaches that don’t affect opposite-sex partners. To start, if you live in a state that doesn't recognize same-sex marriages or other legal relationships, you may have trouble getting a court divorce where you live.
Can You Get a Divorce Where You Live?
If you and your spouse got married in a marriage-equality state, but your current state doesn’t recognize same-sex marriages, a court may be reluctant to accept your divorce case. It may say that it doesn’t have jurisdiction to handle your divorce -- that is, the court may claim that it lacks the power to divorce you because, according to state law, you aren’t married.
If that happens, you may think you can just travel back to the state where you got married and ask for a divorce there, but that's likely not true. States have residency requirements for obtaining a divorce, and one of you would have to live there long enough to establish residency to get the divorce. Moving is not usually a realistic option, but if you can’t work it out any other way, one of you may need to relocate, at least temporarily.
Before taking drastic measures, however, it’s worth attempting a divorce in your home state. If you and your spouse can resolve any disputes before you go to court, you may find a sympathetic judge who will take your case. If not, you might ask for an annulment of your marriage on the grounds that it wasn't legally valid in your home state -- though this is not ideal because you never want to give a court the opportunity to rule that a same-sex union is invalid.
If you married or registered your partnership in more than one locality, it is very important that you legally end it in all of those places. To learn more, see Same-Sex Divorce: Dealing With Multiple Registrations.
On June 26, 2013, the U.S. Supreme Court issued its decision in United States v. Windsor and struck down the section of DOMA (the federal Defense of Marriage Act) that defined marriage as a union between a man and a woman.
Under the Supreme Court's decision, it was clear that same-sex married couples living in one of the 16 U.S. jurisdictions that recognize same-sex marriage qualified for federal benefits (including tax benefits) previously limited to opposite-sex married couples. However, the Court did not address Section 2 of DOMA, which allows states to ignore valid same-sex marriages entered into in other states, or whether Section 2 would impact federal recognition. For example, the Court did not address whether the IRS (or other federal agencies) would recognize the marriages of same-sex married couples living in non-recognition states.
These issues are becoming clearer as time goes on. Right now, we now know that some federal agencies, such as the Social Security Administration, will continue to look to the place of residence (where a couple lives) to determine whether married couples qualify for benefits. As a result, same-sex married spouses living in non-recognition states will not be eligible for Social Security benefits based on their spouse's work record.
But other federal agencies, such as the U.S. Citizenship and Immigration Services (USCIS), will look to the place of celebration (where the marriage was performed) to determine whether same-sex married couples are eligible for benefits.
In August 2013, the U.S. Department of Treasury ruled that all same-sex couples that are legally married in any U.S. state, the District of Columbia, a U.S. territory or a foreign country will be recognized as married under all federal tax provisions where marriage is a factor. This includes provisions governing:
- filing status
- personal and dependency exemptions
- standard deductions
- employee benefits
- IRA contributions
- the earned income tax credit, and
- the child tax credit.
The Treasury Department further clarified that federal recognition for tax purposes applies whether a same-sex married couple lives in a jurisdiction that recognizes same-sex marriage (such as California) or a non-recognition jurisdiction (such as Texas). But, the decision does not apply to same-sex couples in domestic partnerships or civil unions.
So here’s the lingering problem with divorce and taxes for same-sex couples in civil unions and domestic partnerships: When you divorce, the settlement you make with your partner may involve paying your ex money, either as a property settlement or as "alimony." If you were legally married, those financial transactions related to your divorce would be tax-free events. But, if your a same-sex couple in a civil union or domestic partnership, your relationship is not federally recognized – and that means you aren’t eligible for the broad exemptions from taxation that are bestowed on spouses.
Payments you make to your ex as part of the dissolution of your union or partnership could be considered a gift from you to your ex, or could be classified as income on your partner’s taxes. And, it doesn't appear that you can avoid taxes on child support, because the technical rule only exempts payments to a former “spouse.”
It may take years to sort out these questions, with possible audits of taxpayers, appeals from IRS and tax court rulings, and likely changes in court and government codes. In the meantime, as you and your soon to be ex approach your property settlement and support arrangements, we encourage you to talk with a local tax attorney or accountant who is familiar with the rules for same-sex couples in your particular state.
Adapted from A Legal Guide for Lesbian & Gay Couples, by Frederick Hertz and Emily Doskow.