Federal Income Tax Implications of Supreme Court Decision United States v. Windsor

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The U. S. Supreme Court’s decision in United States v. Windsor, 570 U.S. ___ (2013) implicates important changes to the interpretation and administration of federal tax laws (including, income, gift and estate taxes). On June 26, 2013, the Supreme Court held that Section 3 of the Defense of Marriage Act (“DOMA”) is unconstitutional. Section 3 of DOMA requires that, for purposes of federal law, marriage is limited to the union of one man and one woman and “spouse” means someone of the opposite-sex. Prior to the Windsordecision, same-sex marriages were not recognized by the federal government for federal tax purposes. After the Windsor decision, same-sex marriages are recognized by the federal government for federal tax purposes if the particular state recognizes same-sex marriages. Currently, Florida does not recognize same-sex marriages.

The Windsor decision could affect same sex married couples’ federal income taxes in many ways.  Same-sex couples who are recognized as married under the Internal Revenue Code would be required to file either jointly (“married filing jointly”) or separately (“married filing separately”). Marriage recognition could also affect the amount of certain tax credits, especially those which benefit taxpayers with children, such as the earned income tax credit, the child and dependent care credit, education tax credits, and the adoption credit. The Windsor ruling may also affect whether certain forms of employee compensation are nontaxable, including contributions to dependent care flexible spending accounts and the employer contributions for employer-provided health insurance plans.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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