On August 29th, 2013, the IRS issued a ruling that has been awaited since the Supreme Court’s decision regarding DOMA earlier this summer.
The IRS ruling states that same-sex couples who are legally married in jurisdictions that recognize their marriage will be treated as married for federal tax purposes. This ruling is applicable whether or not the couple lives in a jurisdiction that recognizes same-sex marriage.
Here are a few additional quick facts regarding the ruling:
- Same-sex couples who are legally married will be treated as married for all federal tax purposes, including income and gift and estate taxes.
- The ruling applies to all federal tax provisions where marriage is a factor. This includes filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
- Employers may file refund claims for payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses.
- The ruling can be applied retroactively. Individuals who were in same-sex marriages before the ruling was issued may file original or amended returns choosing to be treated as married for federal tax purposes for prior tax years if those years are still open under the statute of limitations. Taxpayers who wish to file a refund claim for income taxes should use Form 1040X, Amended U.S. Individual Income Tax Return.
We hope that you find this information helpful as you seek to understand the impact on your company and your employees.
If you have any questions, please contact us at 877-332-6387 or via our online contact form.