Same-sex couples to get estate taxes back

In New York, Gov. Cuomo announces opportunity to file for refunds

Jul 23, 2013 @ 4:36 pm

By Darla Mercado

Same-sex couples in New York who paid estate taxes can expect to get their money back.

The Empire State will be issuing estate tax refunds to qualified spouses, according to an announcement today by Gov. Andrew Cuomo.

He cited last month's Supreme Court decision in United States v. Windsor in which the court decided that Section 3 of the Defense of Marriage Act is unconstitutional.

“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,” Mr. Cuomo noted in the announcement. “This financial compensation is one more step toward justice for Edie Windsor, and all of the men and women who confronted similar indifference at a time of deep personal loss.”

Ms. Windsor, a New York resident, sued the federal government after the Internal Revenue Service refused to grant her a $363,000 refund of federal estate taxes she paid after her spouse passed in 2009. Ms. Windsor had also asked for a similar estate tax refund from New York.

New York passed its Marriage Equality Act recognizing same-sex marriages in June 2011. As part of that law, equal treatment was applied to the estates of decedents who passed away on or after July 24, 2011.

Now, in the wake of the Supreme Court's decision, the treatment also will apply to estates of people who were married elsewhere before the date New York began recognizing same-sex marriage, and who were residing in New York when one spouse died, according to the governor's announcement.

Taxpayers can file claims for a refund within three years of the date the original return was filed or two years from the date they paid the tax.

The IRS has not yet delivered any guidance on how it will interpret the Supreme Court's decision.

Advisers should review the estates of same-sex couples who still have an open statute of limitations; however, it won't make sense to file a refund claim in all cases.

“There might be some aggressive valuation positions that the taxpayer may not want audited,” said Ivan Taback, partner in the personal planning department at Proskauer Rose LLP.

“The taxpayer may have valued assets at a low value for estate tax purposes, knowing that the tax is due when it's filed, and the state may not have audited that return,” he added. “You're potentially giving them another opportunity to focus on items in your return you may not want them to pay attention to.”

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Diversity & Inclusion Awards: 2018 nominations are open

Editor Fred Gabriel and special projects editor Liz Skinner discuss the nomination process for InvestmentNews' inaugural Diversity & Inclusion awards.

Latest news & opinion

SEC Chairman Jay Clayton outlines goals for a new fiduciary standard

Rule should provide clarity on role of adviser, enhanced investor protection and regulatory coordination.

Advisers bemoan LPL's technology platform change

Those in a private LinkedIn chat room were sounding off about fears the independent broker-dealer will require a move to ClientWorks before it is fully ready.

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print