IRS and Social Security Administration Differ on Same-Sex Marriage

There’s a very interesting article on the front page of the New York Times today, “Gay Marriages Get Recognition From the IRS” The I.R.S. will now recognize same-sex marriages that were legal where they were entered into, even if the couple do not live in a state that recognizes same-sex marriage. “But the Social Security Administration is now using a ‘place of residence’ standard in determining spousal benefits…,”

There are fantastic ramifications here. The IRS says you are married, but SSA says no. The IRS will require same-sex couples in this situation to file as married, even though many will actually face a marriage penalty. (Many same-sex couples, like my sister-in-law and her spouse are DINKs — Dual-income, no kids — who will be hit with the marriage penalty). Same-sex couples in this situation may get the worse of both worlds; they will pay higher taxes, but will not be able to collect spousal benefits.

Of course, SSA may choose to change its rules. But, as I’ve said before, this will be problematic unless SSA changes its rules for all couples whose marriages are subject to challenge, not just same-sex couples.