Tax inequity stymies gay Lenox couple

Sunday April 10, 2011

LENOX -- Mark Woodward and Lee Scott Laugenour married in August 2005, a year after the state declared same-sex marriage legal. But their union is still not recognized by the federal government, and the couple says their inability to file federal tax returns jointly has impacted their capacity to provide for each other financially.

Woodward, 60, is a paralegal working in New York City, and Laugenour, 53, did not have a paying job last year while running an unsuccessful bid for state representative in the Fourth Berkshire District. Due primarily to taxes on health insurance benefits Laugenour received through Woodward's employer -- benefits that would be tax-exempt for a straight married couple -- they owed the federal government an additional $10,000 in taxes in 2010.

"A lot of straight married couples talk about the marriage penalty, but we have the gay marriage penalty on top of that," said Laugenour. "It's not fair."

The couple was also unable to take the full, joint-filling deduction for the depreciation of a rental property they own.

Woodward said they planned to install solar panels on the roof of their home this year, but that will have to wait given their tax situation.

They file jointly in Massachusetts, but Woodward and Laugenour say filling status has minimal impact on their state taxes. They also said the federal disparity was not as noticeable when they first married and had comparable salaries.

There are other financial obstacles same-sex married couples face when one partner dies, including taxes on transferring ownership of property and spousal Social Security benefits.

State Attorney General Martha Coakley filed suit in 2009 against the Defense of Marriage Act -- a law passed by the U.S. Congress in 1996 that defined marriage as a union between a man and a woman. In July 2010, a federal judge ruled in favor of the suit, which claims the law is unconstitutional because it unfairly excludes same-sex married couples and their families from critical rights and interferes with the state's authority to regulate marriage.

Though President Barack Obama and U.S. Attorney General Eric Holder said they will no longer defend the law, the Massachusetts suit remains open to appeal and is on hold until the U.S. House of Representatives provides the court with information on how it intends, if at all, to participate in the case. The Obama administration has agreed to hold off on any changes in the law until there is definitive word from the federal courts.

Until the law is overturned, Coakley said, same-sex married couples are being denied the "dignity and respect that comes with equality under the law. DOMA is an unjust law, and it harms all citizens by codifying intolerance and discrimination."

Woodward and Laugenour both expressed disappointment with Obama and the federal government for not doing more to overturn the law, saying the president's decision to not defend the law hasn't resulted in any real changes in the lives of same-sex couples.

"This process keeps going and going," said Woodward. "Meanwhile, we're still paying."

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