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Same-Sex Couples Could Get Back Tax Benefits Under Biden Plan

Same-sex couple

Some married same-sex couples may get retroactive federal income tax refunds if Congress passes the latest version of President Joe Biden’s Build Back Better Act.

The bill, a sweeping social and environmental spending plan, would make those who were legally married before 2010 eligible for certain benefits that are now otherwise unavailable, CNBC reports.

After the Supreme Court struck down the main part of the Defense of Marriage Act in 2013, allowing the federal government to recognize same-sex marriages, the Internal Revenue Service started letting couples in these marriages file amended tax returns — jointly as a couple — back to 2010. But under the current version of the Build Back Better Act, same-sex couples married before that date could file amended returns back to the year of their marriage.

Five states offered legally recognized marriages to same-sex couples before 2010 — Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont — as did the District of Columbia.

Allowing the amended tax returns back to the date of the marriage “is a fair thing to do,” Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, told CNBC. “People were married [but] the federal government wasn’t recognizing their marriages.”

If the bill passes in its current form, couples in which the spouses have a wide gap in income would benefit most from refiling, financial planner Jeffrey Levine told the business channel. Spouses with similar incomes likely wouldn’t see an advantage from refiling as a married couple, as that would probably push them into a higher tax bracket.

The House of Representatives may vote on the bill this week, after which the Senate would take it up. Both chambers have a Democratic majority, but some of the more conservative Democrats may seek to amend the bill to cut spending.

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