Tax time: new federal rules for domestic partners

Thom and I filed our taxes earlier this week, and a new twist is that the IRS now wants couples like us—registered domestic partners (RDPs) in community-property states—to split their income on their federal returns. This affects Washington, Nevada, and California. From Publication 555 (Rev. December 2010):

For 2010, a RDP in Nevada, Washington, or California (or a person in California who is married to a person of the same sex) generally must follow state community property laws and report half the combined community income of the individual and his or her RDP (or California same-sex spouse).

It’s great (and just) that the IRS recognizes state community-property rights (i.e., as with married couples, any earned income and deductions are considered to be held jointly), but by virtue of the Defense of Marriage Act (DOMA), which bars federal recognition of same-sex marriage, gay couples still have to file as single persons. That means unlike federally recognized married couples, we can’t file one joint federal return. (Well, in any case we’re not married in California by virtue of Prop 8, but that’s a whole ‘nother issue.) No, that would be too easy. We still have to file separate returns while evenly splitting our income and other community property, and taking into account any separate property (like inheritance, assets gained before the partnership, associated interest, etc.).

So we filed by mail and included a cover letter explaining our situation, just in case some IRS agents aren’t up to speed with the new rules, and a worksheet showing the allocation of our community vs. separate property. The bottom line is, due to our particular circumstances, we have a lower tax liability this year compared to last year under the completely single-person tax treatment, but it would be nice if we could file one federal return and not have to do the extra accounting.

California gives RDPs basically the same rights as married spouses, and for the last two years we’ve filed our state tax returns jointly (and electronically). Easy peasy. For this—not just convenience but more importantly, equality—and a whole lot of other reasons, DOMA has got to go.

» See also: Lambda Legal FAQ (PDF); New York Times Bucks blog entry, “Tax Season Gets Trickier for Some Gay Couples“.

Moving forward from Prop 8

As you’ve no doubt heard by now, the California Supreme Court upheld Prop 8, the ban on gay marriage, while recognizing the validity of the marriages performed prior to its passage, from June through Election Day 2008. This is basically what most people expected, so I’m not too surprised, but a half-victory is still disappointing. The decision as well as a news release summarizing the opinions are available on the court website (PDF).

The court saw Prop 8 as merely withholding the designation of marriage from same-sex couples and leaving the substantive rights intact in the form of domestic partnership, and the majority felt that doing so neither threatens equal protection nor rises to the level of a constitutional revision, which requires a higher threshold to enact than an amendment.

Prop 8 decision protest

Only Justice Carlos R. Moreno, the lone dissenter, seems to get what our side has been saying all along:

In my view, the aim of Proposition 8 and all similar initiative measures that seek to alter the California Constitution to deny a fundamental right to a group that has historically been subject to discrimination on the basis of a suspect classification, violates the essence of the equal protection clause of the California Constitution and fundamentally alters its scope and meaning. Such a change cannot be accomplished through the initiative process by a simple amendment to our Constitution enacted by a bare majority of the voters; it must be accomplished, if at all, by a constitutional revision to modify the equal protection clause to protect some, rather than all, similarly situated persons.

So what are the silver linings? First, that the approximately 18,000 same-sex marriages performed last year are recognized. Second, that a movement is afoot to educate and persuade the public, and bring marriage equality back to the ballot. The tide has turned; time and momentum are on our side. And third, that domestic partnership, while not at risk during this case, still exists. Yes, it is a “separate but equal” institution — it’s impossible to imbue the status of domestic partnership with the aura of marriage — but it’s an important part of California family law.

Just partnered

Thom and I became registered domestic partners on February 13, 2009, and have been planning a wedding ceremony for this September, which from the outset we said we would have regardless of the Prop 8 decision. Prop 8 does not diminish the personal meaning of our relationship. Regardless of what the state recognizes, we will do what countless other couples, gay and straight, have done: stand before our community of family and friends, and pledge our life and love to each other.

Taxes are taxing

Yay, I’m done with my taxes. I had started my federal return a while ago, and today went back to it and filed electronically. Then I filed my California return electronically as well. The state return was convenient, especially since I didn’t have any differing federal vs. state adjustments to reconcile, but some of the state e-file instructions were confusing. If I had followed the “enter amount from line X from Form 1040” kind of instructions blindly without also reading some of the regular form instructions on their site, I would’ve over-reported a big subtraction to my income.

My first inkling something was wrong was when it said that I qualified for a renter’s credit (which I normally don’t qualify for) and that I was expecting a full refund of all my state tax withholding! I wish! But I went back a few pages, saw what was going on, and changed some of the numbers. I’m getting a small refund. Good enough.

Next year’s process for this tax year will be interesting. Thom and I became registered domestic partners this year, and in California RDPs must file with the same status as married couples. OK, fine. But of course the federal government doesn’t recognize same-sex couples, so we will both have to file as single there and also create a draft “married” tax return on which to base our state taxes. Fun!

Factoid: As an example of the non-recognition, health insurance premiums for partners are federally taxed (where they otherwise wouldn’t be for married spouses); at least California doesn’t tax this, since tax treatment of registered domestic partners is basically equal to that of spouses.

Well, we’ll cross that bridge when we get to it. For now, I’m going to enjoy anticipating my refunds and stimulating the economy.

Honest men, continued

While the memory is still fresh in my mind, I just wanted to flashback to several days ago, when Thom and I registered our domestic partnership.

Although domestic partnerships in California can be filed through the mail, we wanted to make it as special an occasion as possible, so we filed in person at the San Francisco regional office of the California secretary of state. It’s a nondescript office on the fourteenth floor of the state building, and it seemed everyone else there was taking care of more business-related tasks: certifying documents, registering a corporation, etc.

Our number was called, and the person at the window was so gracious and almost happy to see us when we told her we wanted to become domestic partners. (I later asked her name: Elsa.) After taking our fee and forms, she got up and said, “I’ll go enter your information. I’ll be back, and between now and then…”

I thought she was going to say, “You’ll officially be partners.” But she said, “You’ll have one more chance to decide if you want to do this, before I transmit your information to Sacramento.”

Thom wondered if people really back out at this point, and she said, “You’d be surprised.” Ha.

She came back. “Well?”

I don’t remember exactly what we said, but we were sure. We were ready.

She left again and returned several minutes later, this time coming out into the lobby where we were sitting. She put her hands on our shoulders, congratulated us, and gave us a letter and our certificate of domestic partnership. This was really happening. I was so happy.

Thom and I left the office, and hugged and kissed in the hallway. We took a photo of ourselves with our certificate and then left the building.

It was Friday, the 13th. And it had started to rain. Still, we’ve always said we’re both pretty lucky.

Honest men

Big news: Thom and I got hitched! Basically. We registered as domestic partners, which means we now have most of the same rights as spouses in the state of California. We’ve been meaning to do this for a long while and finally decided to do it today, as close to Valentine’s Day as possible, which actually meant Friday the 13th. (Obviously we’re not superstitious.)

We went to the San Francisco office of the California Secretary of State to register in person, and here we are, all newly domestic-partnered:

Just partnered

Afterward we had a Coraline evening: we went to the Cartoon Art Museum to see an exhibit of Coraline art, and then to the Metreon to see Coraline in 3D. I loved it.

Our Valentine’s Day weekend continues with a little road trip. Tomorrow we drive down to San Simeon to visit Hearst Castle, then up the coast a bit from there to have dinner in Carmel. We’ll overnight in Monterey, then on Sunday visit the Monterey Bay Aquarium.

Love is in the air!

[See also: “Honest men, continued.”]