Same-Sex Spouses Could See Tax Windfall Under Warren, Chu Bills

Democrats in Congress are backing legislation that would allow married same-sex couples to file amended tax returns going back to the date of their marriage.

Before the U.S. v. Windsor Supreme Court decision of 2013, striking down a key section of the Defense of Marriage Act, the federal government did not recognize same-sex marriages from any state, so legally married same-sex couples in states with marriage equality could not file joint federal tax returns. After the Windsor ruling, the Internal Revenue Service began allowing these couples to file amended returns to claim refunds or credits due as a result of corrected marital status, but only going back three years, and the IRS lacks the power to extend that.

Now Rep. Judy Chu of California and Sen. Elizabeth Warren of Massachusetts, both Democrats, have introduced bills to assure that these couples could file amended returns back to the date of their marriage. Filing jointly rather than separately often reduces a couple's tax liability.

Chu introduced her bill, the Promoting Respect for Individuals' Dignity and Equality (PRIDE) Act of 2019, Tuesday, and the House Ways and Means Committee passed it unanimously Thursday, sending it on to the full House of Representatives. It is not yet scheduled for a vote there, a staffer at her office said. Warren, who is seeking the Democratic presidential nomination, introduced her companion bill, the Refund Equality Act of 2019, Thursday.

Both lawmakers commented on how the current tax policy has affected couples in various states. "Since certain states, including California Connecticut, California, Iowa, New Hampshire, Vermont, and Washington, D.C., adopted marriage equality before the [Windsor] ruling, some legally married same-sex couples were forced to file separate federal income taxes for years," Chu said in a press release. "Because of IRS restrictions, these couples cannot amend their returns to claim reimbursement credits for many prior tax years. The PRIDE Act solves this problem."

"The federal government forced legally married same-sex couples in Massachusetts to file as individuals and pay more in taxes for almost a decade," Warren added in a release from her office. "We need to call out that discrimination and to make it right -- Congress should pass the Refund Equality Act immediately."