New Jersey Domestic Partnership Act
New Jersey Domestic Partnership Act
By Donald D. Vanarelli, Esq.
On July 10, 2004, the New Jersey Domestic Partnership Act, N.J.S.A. 26:8A-1 et seq., became effective. The Act, which was signed by Governor James E. McGreevey on January 12, 2004, affords legal status to same-sex couples and to unmarried opposite-sex couples over the age of sixty-two. With its passage, New Jersey became one of only five (5) states in the country (along with California, Massachusetts, Vermont and Hawaii) to grant to same-sex domestic partners some of the same rights afforded to married couples.
According to the legislative findings and declarations accompanying the Act, there are a significant number of individuals in the State “who choose to live together in important personal, emotional and economic committed relationships” which “assist the State by their establishment of a private network of support for the financial, physical and emotional health of their participants.” N.J.S.A. 26:8A-2(a), (b). As such, the Legislature concluded that “these mutually supportive relationships should be formally recognized by statute, and…certain rights and benefits should be made available” to the domestic partnerships. N.J.S.A. 26:8a-2(c). Those rights are outlined below.
It is important to keep in mind that the Act affects not only same-sex couples, but also unmarried opposite-sex couples over the age of sixty-two–couples who have the legal right to marry but who might have chosen not to marry so that they may continue to receive important governmental benefits that may be lost to them upon marriage, such as Medicare and Social Security benefits. Graw, A. and Seidel, M., New Jersey Domestic Partnership Act: Impact On Employer-Sponsored Health Plans, Vo. 12, No. 7, The Metropolitan Corporate Counsel, Inc. (July 2004).
REGISTRATION AS A DOMESTIC PARTNERSHIP
The New Jersey Domestic Partnership Act creates a statewide domestic partnership registry administered by the Department of Health and Senior Services. Couples who wish to take advantage of the protections of the Act are required to register with a local registrar.
The Act specifies that the local registrar, who is either the city clerk or the registrar of vital statistics, shall do the actual registration. The local registrar is required to verify the validity of the domestic partnership, issue a domestic partnership certificate, and record a local copy. The State registrar is also responsible for revising records when a domestic partnership is legally terminated.
REQUIREMENTS FOR REGISTRANTS
A couple meeting the criteria below may establish a domestic partnership by executing and filing an Affidavit of Domestic Partnership and paying the appropriate filing fee. N.J.S.A. 26:8A-4. In order to register as a domestic partnership, the couple must meet the following requirements:
1) They must have a common residence and be “otherwise jointly responsible for each other’s common welfare.” Id. This latter requirement can be satisfied by demonstrating that the couple has a jointly-held mortgage or joint real or rental property; a joint bank account; a will, life insurance policy or retirement plan designating the other as a primary beneficiary; or a jointly owned automobile;
2) They must agree to be “jointly responsible for each other’s basic living expenses” (defined as “the cost of basic food and shelter, and any other cost, including, but not limited to, the cost of health care, if some or all of the cost is paid as a benefit because a person is another person’s domestic partner.” N.J.S.A. 26:8A-3.);
3) Neither may be in a marriage or another domestic partnership;
4) They may not be related to each other up to and including the fourth (4th) degree of consanguinity;
5) The must be of the same sex, or both must be 62 years of age or over;
6) They must “have chosen to share each other’s lives in a committed relationship of mutual caring;”
7) They must each be at least 18 years of age;
8) They must file jointly an Affidavit of Domestic Partnership; and
9) Neither may have been a partner in a domestic partnership terminated less than 180 days prior to filing the Affidavit (unless one of the partners had died) and, if previously registered as a domestic partnership, the prior partnership must have been terminated in accordance with the Act.
Execution of an Affidavit of Domestic Partnership that fails to comply with these requirements subjects the applicant to a fine of $1,000. Id.
RIGHTS AND RESPONSIBILITIES OF DOMESTIC PARTNERS
Exemption under the New Jersey Gross Income Tax Act
Because a domestic partner is now included within the definition of “dependent” under the Gross Income Tax Act, N.J.S.A. 54A:1-2, a taxpayer is now allowed to take a personal exemption in the amount of $1,000 for his/her domestic partner. This does not mean that domestic partners may file joint returns. Hyland, S., A Legal Guide For New Jersey Domestic Partners,www.njdomesticpartnership.com, at p. 42. Thus, presumably, because the exemption applies where a taxpayer’s domestic partner does not file separately, N.J.S.A. 54A:3-1, the exemption is only available if the dependent does not file a return.
Exemption from New Jersey Transfer Inheritance Tax
A domestic partner is now allowed an exemption from New Jersey transfer inheritance tax on the same basis as a spouse: pursuant to N.J.S.A. 54:34-2(a), no New Jersey Transfer Inheritance tax shall be imposed on transfers of property to a domestic partner of a decedent. Also exempt from such tax are transfers to the survivor of a decedent’s share of property held by the domestic partners as joint tenants. N.J.S.A. 54:34-1(f).
Transfers from a domestic partner’s qualified pension, annuity or retirement plan to the surviving domestic partner is also exempted from New Jersey Transfer Inheritance Tax. N.J.S.A. 54:34-4(j).
New Jersey Homestead Property Tax Rebate
The New Jersey Homestead Property Tax Rebate program was not changed by the Domestic Partnership Act; thus, domestic partners must claim homestead rebates separately. Hyland, S., A Legal Guide For New Jersey Domestic Partners, www.njdomesticpartnership.com, at pp. 55-56.
New Jersey Estate Tax; Federal Taxation
Because federal law does not recognize domestic partnerships, a taxpayer may not declare a domestic partner as a dependent on his/her federal tax return. The taxpayer must also pay federal gift taxes on gifts to a domestic partner that total more than $11,000 in a tax year, and there is no marital deduction on the Form 706 for property transferred to a domestic partner.
Moreover, because the New Jersey Estate Tax relies upon the Federal Estate tax credit, domestic partners are not provided relief under the New Jersey Estate tax. Hyland, S., A Legal Guide For New Jersey Domestic Partners, www.njdomesticpartnership.com, at p. 55.
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