Federal Agencies Issue Guidance That Valid Same Sex Marriages Recognized For All Federal Tax Purposes

by Stinson Leonard Street - Employee Benefits & Compensation

On August 29, 2013, the Treasury Department and the Internal Revenue Service issued a public announcement and released Revenue Ruling 2013-17 wherein it answered a number of open questions concerning the impact of the U.S. Supreme Court Decision, United States v. Windsor. This is the case that overturned the federal Defense Of Marriage Act (DOMA).  Specifically, the government ruled that for purposes of federal tax law, marital status will be based on the laws of the state where the marriage is initially established (the “state of celebration rule”), not the state of residency.

Prior to the government’s issuance of Revenue Ruling 2013-17, there was a question as to whether a same sex married couple lawfully married in a state such as Minnesota, would lose the rights and privileges of their marital status if they moved to a state that does not recognize same sex marriage – i.e., Florida or Wisconsin. The Revenue Ruling removes any question as to how the government will treat such couples under the following tax provisions:

  • Filing Status
  • Personal Dependent Exemptions
  • Standard Deductions
  • Pensions (surviving spouse, joint and survivor annuities QDROS)
  • IRA Contributions
  • Earned Income Tax Credits
  • Child Tax Credits
  • Estate and Gift Tax Exemptions
  • Health and Life Insurance Taxation

The rationale for the government’s ruling was explained as two-fold. First, the Ruling is consistent with Revenue Ruling 58-66 in which the IRS determined that individuals who entered into a common law marriage in a state that recognized such marriage could be considered to be as married even if the couple moved to a state which did not recognize common law marriage. Secondly, the IRS cited efficient tax administration.  In the Ruling,  the government states: “Although states have different rules of marriage recognition, uniform nationwide rules are essential for efficient and fair tax administration. A rule under which a couple’s marital status could change simply by moving from one state to another state would be prohibitively difficult and costly for the Service to administer, and for many taxpayers to apply.”

Implications for Employers

Employers should adopt a uniform federal definition of “Spouse” and “Dependent” for purposes of federally regulated benefit plans, including pensions and 401(k) plans. Formal plan amendments likely will be required. Employers that already permit domestic partners to participate in group health plans should cease withholding income taxes on the employed spouse but only if the couple is legally married for federal tax purposes. The rules are more complicated for health and welfare and cafeteria plans which do not require spousal coverage at all, but plan amendments may be necessary for such plans depending on the funding status (insured or self-funded) and plan treatment of same sex couples.

Impact on Individual Taxpayers

Married taxpayers who were taxed on benefits as if they were unmarried are eligible to file for tax refund claims on IRS Form 1040X. Refunds for gift or estate taxes can be claimed on IRS Form 843.

The Ruling also clarified that the federal tax treatment does not change for registered domestic partnerships, civil unions or other formal relationships recognized under state law that are not in fact lawful marriages.  The Ruling is effective September 16, 2013.  The IRS will be issuing further guidance on how plan administrators are to handle these issues for pensions and cafeteria plans for periods before the effective date.

Labor weighs in

On September 18, 2013, the U. S. Department of Labor, Employee Benefits Security Administration (EBSA) issued Technical Release No. 2013-4 to employee benefit plan administrators and plan sponsors, directing them to follow the same “state of celebration”  rule as the IRS, for purposes of Title I of ERISA regulated benefit plans.

The states that currently allow same sex marriages include: California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington and District of Columbia.

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.

© Stinson Leonard Street - Employee Benefits & Compensation | Attorney Advertising

Written by:

Stinson Leonard Street - Employee Benefits & Compensation

Stinson Leonard Street - Employee Benefits & Compensation on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.