IRS Provides Some Guidance on Federal Tax Matters for Same-Sex Marriage

by Thompson Coburn LLP

Earlier this year, in the case of U.S. v. Windsor, the US Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA). Under Section 3 of DOMA, the definitions of "marriage" and "spouse" had been limited to a union between one man and one woman. Section 3 was struck down by the Court on the basis that it violated the equal protection principles of the Fifth Amendment to the U.S. Constitution.

This action by the Supreme Court Raised numerous issues under multiple federal laws for which guidance is necessary from many governmental agencies. One of the first agencies to respond to the issues was the Internal Revenue Service (IRS). The agency released Revenue Ruling 2013-17, which took effect on September 16, 2013, along with two sets of questions and answers that provide some guidance related to tax issues for same-sex married couples, as well as addressing other same-sex relationships. The guidance will impact an employer's administration of its employee benefit plans.


In its guidance, the IRS set out its position that, for federal tax purposes, couples with a valid same-sex marriage will be treated the same as couples with a valid opposite-sex marriage, regardless of where the same-sex marriage couple currently reside or are domiciled. In other words, for federal tax purposes a valid same-sex marriage will be recognized, even if the marriage would not be recognized in the state in which the spouses currently reside or are domiciled. The IRS also provided, however, that this tax treatment does not apply to registered domestic partners, individuals in civil unions, or other forms of recognized relationships that have developed under the laws of different states, but which are not classified as marriage under state law.


Since DOMA was in effect, employers did not (and in many cases could not) treat same-sex spouses as legitimate spouses under the employer's benefit plans. This guidance changes the employer's ability to treat such marriages differently for federal tax purposes. Although the IRS has indicated that additional guidance will be forthcoming to help guide employers, beginning September 16, 2013, same-sex married partners must be treated the same as opposite-sex married partners "for purposes of satisfying the federal laws relating to qualified retirement plans." At the very least an employer should review and update its procedures with respect to retirement-plan provisions related to spouses. Such impacted provisions include:

     -- Qualified preretirement survivor annuity provisions,
     -- Joint and survivor annuity provisions,
     -- Beneficiary designations provisions,
     -- Required minimum distribution provisions, and
     -- Hardship withdrawal provisions.

Employers also should review their qualified domestic relations order procedures, which will now apply in the case of same-sex married participants who divorce.


With respect to welfare benefit plans, employers will no longer need to impute income for federal tax purposes when a nondependent same-sex spouse is covered under the group health plan. In addition, the guidance provides that for open tax years the employer can seek certain refunds for taxes paid on imputed amounts for married same-sex participants (impacted employees also can seek refunds). State law may provide for different tax treatment of these amounts going forward, so further examination of how the payroll department is treating income is warranted. Continuation coverage under COBRA also will need to be offered to same-sex spouses who experience a qualifying event with respect to an employer group health plan. Special enrollment rights under a group health plan are also available with respect to a same-sex spouse.

One interesting result of the guidance is the impact on same-sex spouses under health savings accounts (HSA). The ruling actually results in less favorable treatment. Prior to the changes each member of the marriage was allowed the full HSA deduction limit. Now such spouses must share that limit.

The ruling also has an impact on reimbursement under health care flexible spending accounts and health reimbursement accounts. Employees may now seek reimbursement for their same-sex spouse's qualifying expenses, even if the spouse is not a dependent. This had not been the case prior to the Supreme Court's decision.


The repeal of Section 3 of DOMA raised many critical tax issues for same-sex spouses as well as for employee benefit plans. The IRS's initial guidance will help employer's determine their responsibilities to employees in valid same-sex marriages with respect to those benefit plan matters. Although more guidance is needed, employers can address certain employee tax matters with confidence, and same-sex married employees can be treated, for federal purposes at least, like opposite-sex spouses going forward.

Reprinted with permission from Employee Benefit Review - November 2013


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.

© Thompson Coburn LLP | Attorney Advertising

Written by:

Thompson Coburn LLP

Thompson Coburn LLP 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 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:

- 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.