NY to Refund Gay Couples Forced to Pay Estate Tax
Same-sex spouses forced to pay high New York estate taxes upon the death of their partner will get refunds from the state.
Gov. Andrew Cuomo said Tuesday that the refunds are being issued as a result of the recent U.S. Supreme Court decision that struck down part of the Defense of Marriage Act, also known as DOMA.
In declaring the section unconstitutional, the court granted gay couples the same rights to assets and lower tax costs under estate tax laws that are provided to couples in traditional marriages. Same-sex spouses may have been required to pay thousands of dollars more in New York estate taxes when their partner died.
New York has no estimate of total amount of taxes that will be refunded.
The state legalized gay marriage in June 2011 and a month later, on July 24, the its department extended equal rights under the estate tax law to legally married gay couples, even those married in other states before New York legalized gay marriage. But federal law prevented the state from extending the rights retroactively. The Supreme Court decision allows it to do so.
The court decision came after Edie Windsor of New York sued the Internal Revenue Service, saying it denied certain rights to same-sex couples that it granted to other wedded couples. The IRS had denied her request for a tax refund of $363,000 in federal taxes she paid after her spouse died in 2009.
"I am of course thrilled that I will be getting a refund of the estate tax that I never should have had to pay in the first place," Windsor said. "What makes me even happier, however, is the fact that no other gay person will ever again have to face the indignity of DOMA."
Cuomo said the action adds to the groundbreaking gay marriage law that he pushed and the state Legislature adopted.
"This financial compensation is one more step toward justice for Edie Windsor, and all of the men and women who confronted similar indifference at a time of deep personal loss," Cuomo said.
A refund must be claimed within three years of the tax return or two years after the tax was overpaid. More information is available through the state's Taxpayer Information Center at 518-457-5387.