IRS Announces Tax Guidance for Same-Sex Marriages

Posting by Brian Wynne

Yesterday the IRS ruled that all legally married same-sex couples will be treated as married for federal tax purposes, regardless of where they currently reside. The ruling is the first official guidance from the IRS since the Supreme Court ruled on June 26 that section 3 of the Defense of Marriage Act was unconstitutional.

After the Supreme Court ruling, there was uncertainty on how the federal government would treat same-sex couples legally married in a state that allowed the marriage, but currently residing in a state that doesn’t recognize the marriage. This ruling makes explicitly clear that any same-sex marriage legally entered into in any domestic or foreign jurisdiction will be recognized for federal purposes.

One exception to point out is that the ruling does not apply to registered domestic partnerships, civil unions, or similar arrangements recognized under state law. It must be a marriage. The ruling, however, applies to all federal tax aspects where marriage is a factor, and applies for income, gift and estate tax purposes.

Going Forward and Back
Yesterday’s ruling means that, going forward, all same-sex married couples must file their 2013 tax returns using either the “married filing jointly” or “married filing separately” filing status. There will likely be some confusion for the 35 states that don’t recognize same-sex marriages, of which 24 use the federal return as a starting point in calculating their own state tax. Presumably those states will clarify their policies by the time the 2013 forms come out at the end of this year or the beginning of next year.

The IRS is allowing (but not mandating) same-sex couples to amend prior year returns to file as married. The statute of limitations should allow the 2010, 2011 and 2012 returns to be amended, since it runs 3 years from the due date of the tax return. A same-sex couple should run the numbers first, as their taxes may increase when filing as married.

Other Considerations
The IRS and the Treasury Department intend to issue streamlined procedures for employers to claim refunds for payroll taxes paid on health insurance premiums and other fringe benefits provided to same-sex spouses. These benefits were taxable for federal tax purposes until this ruling. They also intend to issue guidance on cafeteria plans and qualified retirement plans for periods before this ruling, which has an effective date of September 16, 2013.

On August 9, 2013, the Social Security Administration issued guidance for determining entitlement to benefits for same-sex couples. They determined that claims can be paid when the claimant was married in a state that permits same-sex marriage and is currently domiciled in a state that recognizes the marriage. In that announcement, they provided a handy chart of the effective dates for various states. Note that this requirement is more restrictive than the IRS’s ruling, and that many other agencies are aligning their rules with the IRS.

Stay tuned in to this blog for future updates as they occur.

Effective Dates for Same-Sex Marriages

State Date Same-Sex Marriages from Any Other State Were Recognized Date Same-Sex Marriages Were Permitted in the State
California June 17, 2008 – November 4, 2008

June 26, 2013 – present

June 17, 2008 – November 4, 2008

June 26, 2013 – present

Connecticut November 12, 2008 November 12, 2008
Delaware July 1, 2013 July 1, 2013
Iowa April 30, 2009 April 20, 2009
Maine December 29, 2012 December 29, 2012
Maryland February 23, 2010 January 1, 2013
Massachusetts May 17, 2004 May 17, 2004
Minnesota August 1, 2013 August 1, 2013
New Hampshire January 1, 2010 January 1, 2010
New York February 1, 2008 July 24, 2011
Rhode Island May 14, 2012 August 1, 2013
Vermont September 1, 2009 September 1, 2009
Washington December 6, 2012 December 6, 2012
Washington, DC July 7, 2009 March 9, 2010


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