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With Jeffords' Help, Same-Sex Couples Gain New Tax Benefits

Local Matters


Published August 22, 2006 at 1:10 p.m.

WASHINGTON, D.C. -- Gay-rights advocates are hailing the decisive role played by Sen. James Jeffords in last week's enactment of the first-ever change in the U.S. tax code helpful to same-sex couples.

"Non-spousal beneficiaries," including same-sex partners, will now be able to transfer inherited retirement savings into their own retirement accounts without immediately having to pay taxes. The new law also allows individuals to use their retirement plans to respond to certain medical or financial emergencies affecting a designated beneficiary, including a same-sex partner.

Previously, these so-called "rollover" and "hardship" benefits were available only to legally recognized spouses or dependents. The newly achieved reforms could result in hundreds of thousands of dollars in tax savings and emergency assistance for a same-sex partner.

"For gay couples and all Americans with non-spouse beneficiaries, death and taxes weren't only certain, but were also times of great and unequal financial difficulty," says a statement by Joe Solmonese, president of the Human Rights Campaign. The rollover and hardship provisions included in the Pension Protection Act represent "an incredibly exciting victory that will be helpful to millions of gay, lesbian, bisexual and transgender families," adds the head of the nation's largest GLBT rights organization.

The landmark initiatives might still be languishing in congressional committees if not for Jeffords' efforts.

Four years ago, the Vermont Independent became the first senator to introduce a proposal permitting the tax-free rollover of a pension plan to a beneficiary other than a husband or wife, notes James Delaplane, a counsel to the Human Rights Campaign on pension issues. He says Jeffords worked effectively and patiently to muster support for a piece of legislation that some of his colleagues were initially unwilling to accept. "Sen. Jeffords was also very helpful on the hardship provision as it moved through the Senate Finance Committee," Delaplane adds.

The twin initiatives aiding same-sex couples won approval from a conservative -- and often homophobic -- Congress and president because they were part of an omnibus pension regulation overhaul that enjoyed broad bipartisan backing. The 907-page law "fixes tax problems for millions of heterosexuals, too," Delaplane observes.

The legislation was approved in the House by a 294-132 vote and in the Senate by a 97-2 margin.

Jeffords' work in steering the equal-rights measures through the Senate crowns a 32-year Capitol Hill career notable in part for its devotion to fairness to all families. "No matter what his political affiliation -- Republican or Independent -- Sen. Jeffords always led fights for pro-equality legislation," says Human Rights Campaign spokesman Brad Luna. "It will be a legacy of his."