Bad News, Married Gay Couples—Here’s How Your Taxes Are Going to Go Up

Edie Windsor will pay less in tax without DOMA, but most gay and lesbian couples will pay more.
Edie Windsor will pay less in tax without DOMA, but most gay and lesbian couples will pay more.

Photo by Michael Loccisano/Getty Images for HBO

Marriage equality will reduce the federal deficit because on the spending side some things will go up while others go down, while on the tax side revenues will go up. So how much more will married gay and lesbian couples be paying now that the Defense of Marriage Act is gone and the IRS is required to recognize the validity of your marriage? The answer is—it depends (boring)—but potentially quite large if you and your partner have similar incomes and you’re pretty rich.

This Nerdwallet chart sketches out the pessimistic scenario:

The key assumption here is that both members of the couple have exactly the same annual earnings. If you’re single and you earn $250,000 then you pay taxes at a 33 percent marginal rate. If you marry another person who also earns $250,000 then suddenly you’re at the 39.6 percent marginal rate. Oops!

Now conversely, the tax code does offer what amounts to a tax subsidy for stay-at-home moms or dads. If you’re bringing in $70,000 a year while your unmarried partner stays home and runs the household, then you’re in the 25 percent tax bracket and your partner doesn’t pay anything because he has no income. Get married, and your marginal rate as a household falls to 15 percent.

But these kind of arrangements are, I think, quite rare among same-sex couples. So most married gay and lesbian couples who, thanks to DOMA, have been single for tax purposes are now going to get hit with a higher bill. Of course, there are lots of offsetting benefits to being married and to having your marriage recognized by the federal government, so on the whole there’s nothing to shed tears over here. But some of the people celebrating today are going to be in for a surprise next spring when it’s time to file taxes.