UC Berkeley economics professor Martha Olney and her wife have been together for 30 years. They were married in 1992 at a religious ceremony and had a legal wedding in 2008.
But during those years, Olney has been unable to extend her UC health benefits to her wife, Esther Hargis, a retired reverend, without paying taxes on the cost of those benefits. The couple also could not pay taxes without facing the logistical and financial issues of filing separately.
Now, following the U.S. Supreme Court’s rejection of the Defense of Marriage Act and Proposition 8 in June, the university is beginning to implement changes, including programming changes to its payroll and human resources systems that will benefit UC employees and retirees in same-sex marriages.
Previously, Olney and other UC employees in same-sex domestic partnerships were forced to pay federal imputed income taxes for health benefits given to their partners through UC health care plans. In addition, Olney said she faced a government penalty if she let her wife, who is over the age of 65 and eligible for Medicare, use UC health benefits.
Filing tax returns was also much more difficult for domestic partners. Olney reported that she and her wife had to file separate returns for their own incomes and then combine the two into a joint return, forcing them to file nearly three times as much paperwork as a heterosexual couple would have to.
“Our taxes will now be immeasurably easier to complete,” Olney said in an email. “A weekend rather than a full spring break of effort.”
The university will save money as a result of the new benefits system. Previously, it had to pay taxes on 50 percent of employees’ imputed income under the Federal Insurance Contributions Act. Dianne Klein, a UC spokesperson, said that about 2,700 UC employees paid taxes on imputed income last year.
A percentage of those people have same-sex spouses, Klein said, and will no longer have to pay taxes on imputed income once they are moved over to the plan for married couples. The system should be able to accommodate married same-sex couples by mid-September — a delay that has frustrated some employees, including Olney, who said that UC forms had not been updated quickly enough to reflect the rulings.
“I don’t think it’s deliberately discriminatory, but I do think it’s annoying and unnecessary, and there’s no good excuse for it,” she said.
Olney emphasizes the importance of being “just as legally married as any other person on the street” over the benefit of having to spend less time and money on taxes.
“There is the intangible: We are now simply ‘married,’” Olney said. “No asterisk. No caveat. No ‘same-sex’ adjective. Just married. We hold hands in public more, something we used to reserve for Provincetown, the Castro and Gay Pride.”
Most significant, she said, is the newfound equality for a younger generation that will not experience the same tax and benefit conundra that she and her wife have faced.
“A 9-year-old boy who’s realizing he’s gay doesn’t have to have this (realization), ‘Oh, I’ll never be able to get married, and I’ll never have kids,’” Olney said. “Instead, it’s ‘Oh, when I get married, it’ll be two guys instead of a guy and a gal.’”