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IRS Issues Guidance Recognizing Same-Sex Marriage for Federal Tax Purposes

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August 2013

In the wake of the U.S. Supreme Court’s decision in U.S. v. Windsor, which struck down the Defense of Marriage Act, the Internal Revenue Service (IRS) has issued guidance providing that same-sex marriages will now be recognized for federal tax purposes, regardless of the couple’s state of residence, as long as the marriage was performed in a jurisdiction that recognizes same sex marriages, including a foreign country. Married same-sex couples may therefore file their 2013 federal tax return under a married status. The ruling has retroactive effect, meaning that couples who were married prior to the Windsor decision may amend their prior years’ returns to obtain refunds based on their married status going back to the IRS’s limitations period for refunds (generally three tax years).

In addition, the guidance provides that employers are no longer required to treat benefits provided to same-sex spouses, including group health coverage, as after-tax. Employers may also obtain refunds of any payroll taxes (including FICA taxes) paid on benefits to same-sex spouses previously treated as after-tax for the limitations period (also three years).

It should be noted that the recognition does not extend to civil unions, domestic partnerships, or any other type of unions recognized by states. The IRS will begin enforcing these rules on September 16, 2013. In the coming months, the IRS is expected to issue additional guidance on the application of the Windsor decision to the many specific employee benefit plan spousal rights issues that employers now face. We will update you on this guidance when it is released.  

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