After weeks of speculation about how the Internal Revenue Service will treat same-sex marriages, we have our answer: the IRS has announced that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. And that’s what we expected.
But here’s what we didn’t: the ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.
The announcement follows on the heels of the June 26 Supreme Court Windsor decision (the DOMA, or Defense of Marriage Act ruling). In Windsor, the Supreme Court ruled DOMA unconstitutional, confirming that the federal government did not have the right to regulate the definition of marriage.
U.S. Secretary of the Treasury Jacob J. Lew said about the announcement:
Today’s ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve. This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change.
So what does all of this mean? For federal tax purposes, same-sex couples who are married under state law are considered married for federal purposes. This includes not only income taxes but also gift and estate taxes.
The ruling applies to any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory, or a foreign country (!). However, the ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.
For filing purposes, this means that the choices for legally-married same-sex couples are now the same as anyone else: single; married filing jointly; married filing separately; head of household and qualifying widow(er) with dependent child. It also means that individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations. For statute of limitations purposes, refund claims can generally be filed for tax years 2010, 2011, and 2012 (some exceptions apply). If you’re not sure about the statute of limitations – or whether it makes good tax sense to file an amended return – consult with your tax preparer.
Of course, this is just one piece of the puzzle. There are literally thousands of federal statutes thought to be affected by Windsor – including those that focus on cafeteria plans and other benefits. Expect to see more announcements over the next few weeks.
Both Treasury and the IRS have announced the intention to issue further guidance on a number of tax-related issues. I’ll keep you updated and provide more in-depth coverage as we know more.
