Marriage Equality: NY Gay Couples to Receive Estate Tax Refund Post-DOMA

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By Jason Bramwell

Same-sex spouses in New York who had to pay estate taxes following the death of their partner will get refunds from the state as a result of the recent US Supreme Court decision that found a section of the Defense of Marriage Act (DOMA) unconstitutional.

The June 26 court ruling came after Edie Windsor of New York sued the federal government after the IRS denied her refund request for the $363,000 in federal estate taxes she paid after her spouse, Thea Spyer, died in 2009. She also had filed a protective claim with the New York State Tax Department asking for a similar estate tax refund.

"As a result of [the Supreme Court's] decision, New York State is now able to issue refund checks to qualified same-sex spouses who were required to pay taxes for no reason other than their sexual orientation", New York Governor Andrew Cuomo said in a written statement on July 23. "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."

In United States v. Windsor, in which Section 3 of DOMA was declared unconstitutional, the Supreme 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. 

New York did not reveal the dollar amount of the estate tax refunds, citing the privacy provisions of the tax law.

New York legalized gay marriage in June 2011, and a month later, on July 24, the state's tax 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. Last month's Supreme Court decision allows it to do so.

"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."

A refund must be claimed within three years of the date the original tax return was filed, or two years from the date the tax was paid.

"Now taxpayers affected by the Supreme Court decision may amend any previously filed estate tax return where the statute of limitations to apply for a refund remains open", said New York Commissioner of Taxation and Finance Thomas Mattox.

More information is available through the state's Taxpayer Information Center at (518) 457-5387.

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