Same-sex civil union partners who file taxes jointly in Illinois will be breaking the law, according to the Illinois Department of Revenue.
On June 2, the same day that the state's first civil unions took place, the department posted a memo stating that same-sex couples must still file separate tax returns, even if they have had a civil union.
Their reasoning, according to department spokeswoman Susan Hofer, is that Illinois tax law requires spouses who file taxes separately at the federal level to also file separately with the state. Because the Defense of Marriage Act (DOMA) denies same-sex unions, same-sex partners have no choice but to file federal taxes separately.
"Until the law is changed, we don't have the flexibility to change the way people can file," Hofer said.
According to Hofer, DOMA either needs to be thrown out or the Illinois Income Tax Act needs to be changed.
The Illinois Religious Freedom Protection and Civil Unions Act, which took effect June 1, requires that civil union partners be afforded the same benefits and obligations as married couples in Illinois.
Civil-union partners who are not required to file federally will be able to file jointly in Illinois, according to Hofer. Because Illinoisans are flat-taxed, meaning everyone pays the same percentage regardless of income, Hofer said there are no benefits denied to same-sex partners.
That however, may not be entirely accurate.
Windy City Times spoke with three different attorneys—and all agreed that the department's interpretation of civil-union law was flawed.
First off, said Ray Prather, an attorney who has presented widely on the topic, "relationship recognition is a benefit or obligation."
Prather said that the state is required to recognize same-sex civil union couples in all areas now, even if finances are not the key concern.
Anthony Niedwiecki, a professor at the John Marshall Law School, said that part of the problem is that Illinois now has two conflicting laws on the books. One says that people who file individual tax returns federally must also file individually with the state. The other mandates that civil union partners enjoy the same benefits as married people.
"They should have read this as this [tax] law is [now] trumped by the civil-union law," Niedwiecki said.
Hofer said amending the Income Tax Act would be complicated.
"They failed to amend tax code even though they amended other things to account for civil unions," she said.
When asked why the tax act had not been amended, Hofer said that other priorities had taken precedence because the current system created no financial hardship for same-sex couples.
One area where they may not be the case is with insurance benefits. The federal government taxes people whose insurance benefits are obtained through a family member other than a spouse. So does the state. If same-sex couples are forced to file individually, they will likely be taxed for their spousal benefits, said Prather, a clear violation of the civil-union act.
A 2007 report from the Center for American Progress, found that unmarried partners paid an average of $1,069 more than their married counterparts for the same insurance coverage annually.
Hofer said she did not know if civil-union partners would be taxed for insurance benefits, but said she is looking into it and would update Windy City Times.
Prather believes that the state does not need to change the tax code at all and can allow for joint tax returns if it simply updates its system before January.
Richard Wilson, a family and marriage lawyer in Illinois, also had a negative reaction to memo, which he called "bullshit." He said that referencing DOMA as justification for tax regulations was a "misleading, illogical, misstatement of fact."
"By hiding behind DOMA, they're violating the letter and spirit of the civil union law," said Wilson. "They got caught blind-sided, I think, and they don't know what to do."
However, Niedwiecki thinks the real problem is the inevitable list of complications that comes when same-sex people are granted rights different than those afforded to heterosexual couples.
"Whenever you go separate, it's not going to be equal," he said.
