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Top Stories This Week in the Chronicle.
April 20, 2007

Tax time points out flaws
in New Jersey civil unions

Trenton, N.J.--Two months after New Jersey began offering civil unions, couples are discovering that the separate-but-equal institution may be separate, but it is far from equal.

The federal income tax deadline earlier this week gave the most glaring examples of this.

Couples in New Jersey who had civil unions could file joint state tax returns, but because the federal government does not recognize them, had to file federal taxes as though they were single.

Couples in civil unions then had to fill out “dummy” federal tax returns, as if they were going to file jointly, to determine what federal information would carry over into the state returns, like adjusted gross income.

Civil union couples in Connecticut and Vermont and domestic partners in California also must do this double tax form, as do same-sex married couples in Massachusetts.

Another tax issue that came up is health insurance benefits. The federal government regards insurance coverage for domestic partners as taxable income, increasing the gross income and the amount of tax that can be taken.

The same benefits are not taxed for spouses in an opposite-sex marriage.

Rep. Jim McDermott of Washington introduced legislation shortly before Congress’ Easter recess that would eliminate this extra taxation, but its future is uncertain.

This inequality would be considered a luxurious one by many couples who entered into civil unions in the state, only to discover that their employers’ insurance companies restrict benefits only to those in full marriages.

“I called to ask if they were going to be honoring that law and providing me with the same coverage that they would any married couple, and I was told no,” Jennifer Bonfilio told the Newark Star Ledger, discussing her efforts to be added to her partner’s New Jersey Carpenters Funds health insurance. “The woman on the phone actually said to me, ‘We do not have to obey New Jersey law.’”

In some instances, the insurance falls under federal law, and insurers interpret the 1996 Defense of Marriage Act as barring them from providing coverage to same-sex partners.

However, according to Michele Granda, a staff attorney with Gay and Lesbian Advocates and Defenders, that decision really lies with the companies, not with the federal government.

“It’s the employer’s own choice to decide who’s a beneficiary, and the federal government doesn’t prevent employers from doing the right thing,” she told the New York Times. “Those employers are purposefully choosing to discriminate against their employees.”

The Human Rights Campaign, which every year releases a “Corporate Equality Index” rating Fortune 500 companies, indicates that over half of the nation’s top corporations offer domestic partner health benefits, although their insurance plans are also regulated by federal laws.

“In the employment sector in particular, folks don’t understand civil unions, and then when they come to understand what they are they find ways to disrespect them,” said David Buckel, an attorney with Lambda Legal Defense and Education Fund. “After all, the state has said that these relationships aren’t worthy of marriage.”

The law establishing civil unions in New Jersey also established a commission to examine and rectify problems with the legislation. The problem with the commission, however, is that it has not yet been put together.

“We created that so we could have a formal way for people to present problems that might come out of this that we might have to correct legislatively,” said State Sen. Loretta Weinberg, a co-sponsor of the civil union law.

While no official complaints have yet been filed with the Division of Civil Rights in the state attorney general’s office, law professor Nathaniel Persily believes that some problems “were inevitable.”

“Whenever there’s a sort of spotty civil innovation, it takes civil society some time to catch up,” he said. “The state has not sent the clearest signal. The fact that they are given different status under law brings up the possibility that private companies will also treat them differently.”



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