Marriage provides many more financial benefits than civil unions

Bridal cake topper of two men

As the moral debate over same-sex marriage rages on, many gay couples argue that they just want the same legal and financial benefits that married couples enjoy.

Some opponents see civil unions as a reasonable compromise, offering gay couples many of the rights straight couples enjoy.

Eight states currently allow civil unions, while gay marriage is legal in six states and pending in two more.

But when it comes to financial benefits, there are big differences between a marriage and a civil union.

According to a report given to the Office of the General Counsel of the U.S. General Accounting Office, there are more than 1,138 benefits the federal government grants to married couples.

They cover everything from Social Security and veterans benefits to taxation, loans, housing and food stamps.

GLAD (Gay & Lesbian Advocates and Defenders) points out that few of these federal benefits related to marriage are granted to those joined in civil unions.

Civil unions essentially only offer benefits and financial advantages on the state level in the state where they are recognized. They do not include any federal protections or benefits since the federal government does not recognize civil unions or gay marriages.

So, even in a state like Massachusetts that recognizes full same-sex marriage, that couple is not recognized as married under federal law.

Civil unions were first created in the United States in Vermont in 2000. A number of other states, including Oregon, Nevada, Delaware and California, eventually also added civil unions (also called "domestic partnerships") to allow gay couples state rights similar to marriage.

But under the U.S. Defense of Marriage Act of 1996, other states are not legally obligated to recognize these unions.

While more states are embracing civil unions, they still don’t address federal taxation and benefits.

One big hot button is Social Security survivor benefits. While a married partner would be entitled to such benefits if his or her spouse dies, a partner in a civil union would not be entitled to anything.

The same goes for federal pensions and benefits.

Then there are federal income taxes. Married couples can file joint federal returns, but those in civil unions can only file jointly on their state returns in the state where the union is recognized.

Depending on the tax bracket and income of the couple, filing a joint federal tax return can save thousands.

That's because combining income and deductions would let them take advantage of lower tax brackets.

In some cases, it can be harder for a gay couple to qualify for some tax breaks because the credits phase out sooner for single filers.

Since the federal government does not recognize gay marriages, gay couples typically have to file as adult family members living in the same household.

One partner typically will file as a head of household while the other could be considered a qualifying relative.

In most cases, filing as a head of household instead of married filing jointly will expose more income to a higher tax bracket. If the couple doesn't itemize, standard deductions are also lower for a head of household than for married couples.

There also are a variety of other credits and benefits that gay couples cannot receive.

These include federal spousal employment benefits, exemptions from income tax on a partner’s health benefits and the right to take leave from work to care for a family member.

While partners of civil unions don’t have to pay state taxes for gifts, they are not eligible for federal tax exemptions on those gifts.

Unlike married couples, partners in civil unions cannot make emergency medical decisions outside the state where their union is recognized.

Since civil unions are only valid within a state, they can also cause big financial problems if a couple moves. So, should a civil union couple move from Illinois to Kentucky, they could face higher taxes and the loss of benefits at the state level.

While President Obama recently expressed his support for the legalization of gay marriage, there's still a steep hill to climb. Americans are evenly divided on the matter, and 31 states currently have state constitution amendments banning same-sex marriages.

Gay marriage, and the full financial benefits that come with it, may be a reality in the future, but it probably won’t be tomorrow.

In the meantime, even if more states approve civil unions, same-sex couples will not enjoy all of the federal financial benefits of a married couple.

The good news for gays and lesbians is that, aside from federal and state issues, more private businesses are recognizing civil unions and state-level gay marriages.

This includes some employers, insurance companies and banks that are increasingly recognizing domestic partnerships with almost all of the benefits of a traditional married couple.