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Promoting Respect

Will the PRIDE Act make it easier for same-sex couples to access government benefits?

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For five decades now, since the Stonewall Riots occurred in June of 1969, June has been designated as LGBTQ Pride Month—a time when we band together for LGBTQ visibility and camaraderie with the intent of moving forward in the fight for equal rights.   

That’s why the PRIDE Act of 2019, which was introduced in June, may be even more meaningful to same-sex married couples who joined their hearts years ago but are still being excluded from Medicare and Social Security benefits based on their spouses’ work record rather than just their own.

The PRIDE Act may also streamline the process of retroactively obtaining benefits that should rightfully be paid to same-sex spouses since the Defense of Marriage Act (DOMA) was invalidated back in 2015. For instance, according to the Human Rights Campaign (HRC), the Social Security Administration issued a new guidance in early 2017 that reversed its discriminatory policies toward LGBTQ couples seeking benefits. The Administration will also compensate individuals whose claims had previously been denied before marriage equality was mandated.

How Can the PRIDE Act Benefit You?

The PRIDE Act (an acronym for Promoting Respect for Individuals’ Dignity and Equality) is also officially known as “a substitute to H.R. 3299” and would essentially remove gendered language such as “husband” and “wife” from the United States tax code, and instead use more neutral and inclusive terms such as “married couple” and “spouse.”

Further, this ruling would permit legally married same-sex couples to amend their tax-filing status for income-tax returns, and do so outside of the statute of limitations. For instance, in this case, the Internal Revenue Code of 1986 would be amended in order to clarify that all provisions apply to legally married same-sex couples, in the same manner as other married couples.

As an example, if married same-sex partners each filed an individual tax return for a tax year that ended prior to September 16, 2013, for which a joint tax return could have been filed for that couple “but for the fact that such holdings were not effective at the time of filing,” the statute of limitations for changing that to a joint return will be extended.

The PRIDE Act also includes H.R. 3294, the Refund Equality Act. This legislation updates the tax code to allow same-sex couples who were married prior to the repeal of DOMA to claim the tax refunds to which they are rightfully entitled.

So even though many same-sex married couples are now filing their taxes jointly following the fall of DOMA, many have yet to receive the refunds that opposite-sex married couples have already received.

Introduced in Congress on June 18, 2019, the PRIDE Act is now in the first stage of the legislative process. So before it moves on for a House and Senate vote, it will likely have to be considered in committee. (Bills and resolutions are typically referred to committees that debate the bill prior to sending it on to the whole chamber.)

Senator Elizabeth Warren is also introducing companion Senate legislation to correct the IRS code post-U.S. v. Windsor, the landmark Supreme Court marriage-equality case.

While there is still a long way to go, the PRIDE Act would represent another big step toward true LGBTQ equality with regard to financial and tax benefits.

Still Have Questions about Benefits?

Over the past few years, there have been a multi-tude of legislative changes that affect the LGBTQ community, as well as various protections and rights that relate to tax, financial, and legal issues.

Even though much of the newer legislation has been in favor of protecting the rights of LGBTQ individuals and couples, laws are always complicated by a lot of “fine print.”

Because of that, it is essential to not assume anything as you put your short- and long-term financial plans into place. This is particularly important if your aim is to coordinate your personal savings and healthcare benefits with those that are offered through the government, while also ensuring that both you and your spouse can make the most of what is rightfully available to you.

With that in mind, it is important to discuss your current and long-term objectives with a knowledgeable financial advisor who is in touch with the laws and rules that pertain to the LGBTQ community. That way, you can be more assured that you are moving in the right direction with a plan that can be updated if or when new legislation is enacted in the future.

This article appears in the August 2019 edition of OutSmart magazine. 

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Grace S. Yung

Grace S. Yung, CFP, is a certified financial planner practitioner with experience in helping domestic partners plan their finances since 1994. She is a principal at Midtown Financial LLC in Houston and was recognized as a “Five-Star Wealth Manager” in the September 2017 issue of Texas Monthly.

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