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NY to Refund Gay Married Couples Estate Taxes

Repeal of DOMA prompts state to give back

The New York Times reported today that the State of New York will refund estate taxes paid by lesbian and gay married spouses, according to a statement from Gov. Andrew Cuomo. The decision comes after the Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), which prohibited the federal government from recognizing gay and lesbian marriages as valid.

Heterosexual married spouses were and remain exempt from paying taxes on property they inherit after a spouse’s death.

“The Supreme Court’s decision to strike down DOMA was a groundbreaking civil rights victory that brought the LGBT community closer to the true meaning of equal rights under the law,” Cuomo said. “As a result of that 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.”

United States v. Windsor, the lawsuit that successfully challenged DOMA, came about because New York City resident Edith Windsor was forced to pay $363,000 in estate taxes when she inherited property after the death of her spouse, Thea Spyer. It was not immediately clear when Windsor would recoup the amount.

“I want to thank Governor Cuomo, who is a true hero in the struggle for the freedom to marry,” said Windsor in a statement. “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. What makes me even happier, however, is the fact that no other gay person will ever again have to face the indignity of DOMA.”

 

New York State legalized same-sex marriage in 2011. This prompted the Tax Department to define that, for New York State estate tax purposes, the Marriage Equality Act takes effect for the estates of decedents who died on or after July 24, 2011. Given the Supreme Court’s decision, this treatment now also applies to estates of individuals married to same-sex spouses who died prior to July 24, 2011.

 

Generally, a claim for credit or refund of an overpayment of estate tax must be filed by a taxpayer within three years from the date the original return was filed or two years from the date the tax was paid. The State did not reveal the dollar amount of the estate tax refunds, citing the privacy provisions of the Tax Law.

 

“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 Commissioner of Taxation and Finance Thomas H. Mattox.

 

For more information, contact the New York State Taxpayer Information Center at 518-457-5387.

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