Treasury and IRS Issue Guidance on DOMA—Many, but Not All, Questions Are Answered

by Epstein Becker & Green

On August 29, 2013, the Treasury Department ("Treasury") and Internal Revenue Service ("IRS") jointly issued guidance in Revenue Ruling 2013-17, 2013-38 IRB, and two accompanying sets of Frequently Asked Questions (together, the "Ruling"). The Ruling answers some (but not all) questions raised by the U.S. Supreme Court's landmark decision in United States v. Windsor, 570 U.S. ___, 133 S. Ct 2675 (2013), as it applies to federal taxes and, specifically, to employee benefits. In our Client Alert entitled "The Supreme Court Strikes Down DOMA—Benefit Plan Sponsors Have Much to Consider," we discussed the Supreme Court's decision, which found Section 3 of the Defense of Marriage Act ("DOMA") unconstitutional. The Supreme Court's ruling meant that, for purposes of federal law, legal same-sex marriages (under state or foreign law) must be recognized on the same terms as an opposite-sex marriage. Since that decision, employers, among others, have been waiting for guidance from the U.S. government on how to deal with the myriad issues raised by the effective repeal of DOMA, which impacted a vast number of federal laws, including important tax rules. By releasing the Ruling, the Treasury and IRS have addressed a number of the tax issues that are important for administering employee benefit plans. Although the government's position stated in the Ruling is broad, significant issues still remain and will need to be addressed in further guidance.

Perhaps the most significant effect of the Ruling is that it provides the following answers to three fundamental issues that have concerned employers and affected plan participants:

  1. The Ruling clarifies that a same-sex marriage entered into in a state (which includes a foreign jurisdiction) that legally recognizes that marriage (the so-called "state of celebration") will determine whether the marriage is recognized for federal tax purposes, even if the state where the couple resides does not recognize same-sex marriage. Therefore, if a same-sex couple is married in one of the states (and the District of Columbia) or a foreign country that recognizes same-sex marriage, then the marriage will be recognized for federal tax purposes, no matter where the couple may live or work.
  2. The Ruling indicates that persons in domestic partnerships, civil unions, or other similar arrangements under state law will not be recognized as married for federal tax purposes and, therefore, will not be accorded the same benefits as same-sex couples.
  3. The Ruling provides some particular guidance on how employers and plan participants can apply for refunds for certain taxes that they have already paid because the same-sex marriage was not previously permitted to be recognized. The Ruling is effective September 16, 2013, but employers and legally married same-sex couples may rely on the effect of the guidance now to file amended returns for prior years or make claims for overpayments of tax for those periods for which the statute of limitations has not expired.

The Ruling provides the following specific guidance to sponsors of group health plans and qualified retirement plans (including 401(k) and pension plans):

I. Health Plans

  • If an employer provided health coverage to a same-sex spouse and included the value of that coverage in the employee's gross income, the employee can file an amended return and recover federal tax paid on the value of the health coverage of the employee's spouse.
  • If an employer sponsored a cafeteria plan that allowed employees to pay premiums for health coverage on a pre-tax basis, a participating employee may file an amended return and recover taxes paid on an after-tax basis for the employee's same-sex spouse.
  • In the situations described above, the employer may claim a refund for the Social Security taxes and Medicare taxes paid on such benefits, even if the employer is unable to locate a former employee who received such benefits. A special procedure for employers to file claims for refunds or make adjustments will be provided in future guidance.
  • The above applies only for years where the statute of limitations is still open, which is generally the previous three years, e.g., 2010, 2011, and 2012.
  • In the situations above, an employer may not claim a refund of over-withheld income tax for prior years (although, as described above, the employee may do so for "open" years). An employer may make adjustments for over-withheld income taxes in the current year provided the employee is reimbursed by the end of the year.

II. Qualified Retirement Plans

  • A qualified retirement plan must recognize a same-sex marriage that was validly entered into in a jurisdiction whose laws authorize the marriage, even if the plan participant lives or works in a jurisdiction that does not recognize the validity of same-sex marriages.
  • A qualified retirement plan must treat a same-sex spouse as a spouse for all federal tax purposes, including paying the death benefit payable on a 401(k) plan or the qualified pre-retirement or qualified joint and survivor annuity (QPSA/QJSA) to the same-sex spouse, unless the same-sex spouse has waived his or her rights in accordance with spousal consent procedures applicable to same-sex spouses.
  • As with the other provisions of the Ruling, qualified retirement plans must comply with the guidance as of September 16, 2013. However, what remains unanswered is the retroactive application of the Windsor decision to qualified retirement plans and other tax-favored retirement arrangements. The IRS is expected to issue future guidance on plan amendment requirements (including the timing of any required amendments) and any necessary corrections relating to plan administration.

Additional Guidance

As indicated above, the Ruling is certainly not the last word on how the Windsor decision will affect employee benefit plans. Further guidance may also come from other agencies on certain issues under their jurisdiction. The Ruling does not affect treatment of same-sex spouses under any state or local laws.

Employers generally should review their plans and programs and adjust their administration, including their tax-withholding as to health benefits and cafeteria plans. It will also be important to establish procedures, if none yet exist, to identify employees who are same-sex spouses who were legally married in any jurisdiction.

* * *

The guidance is a helpful start for employers and plan administrators to make some of the changes needed in response to the Windsor decision. While we have answers on adjustments needed to group health plan administration, we still are not clear on the retroactive application of same-sex spouses' rights to retirement plan benefits. We will keep you advised as we learn more.

IRS Circular 230 Disclosure

To ensure compliance with certain IRS requirements, we inform you that any tax advice contained in this publication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.


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.

© Epstein Becker & Green | Attorney Advertising

Written by:

Epstein Becker & Green

Epstein Becker & Green 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.