IRS recognises same-sex marriages for US federal tax purposes IRS recognises same-sex marriages for US federal tax purposes

IRS recognises same-sex marriages for US federal tax purposes
31 Jul 2014

The Internal Revenue Service( IRS) has announced that same-sex couples, legally married in jurisdictions that recognise their marriages, will be treated as married for federal tax purposes. This applies regardless of whether the couple lives in a jurisdiction that recognises same-sex marriage or a jurisdiction that does not recognise same-sex marriage.

The IRS ruling implements federal tax aspects of the June 26 U.S. Supreme Court decision in U.S. v. Windsor invalidating section three of the Defense of Marriage Act. The IRS has also posted FAQs on its website that include some guidance for employers in dealing with situations where employees used aftertax dollars to pay for health insurance benefits for same-sex spouses.

Background to Rev. Rul. 58-66

More than 50 years ago, Rev. Rul. 58-66 (1958-1 C.B. 60) addressed how to determine the marital status for federal income tax purposes of individuals who have entered into a common-law marriage (not solemnised, but created by an agreement to marry followed by cohabitation - not valid in many states) in a state that recognises such marriages. Under that ruling, the IRS has long recognised marriages based on the laws of the state in which they were entered into, without regard to subsequent changes in domicile – in order to achieve uniformity, stability, and efficiency in the application and administration of the internal revenue code.

Rev. Rul. 2013-17 builds on existing rule

The new ruling follows this line of reasoning, explaining that 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.

For federal tax purposes, the IRS now recognises the validity of a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile. Note that 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 will be covered by this ruling.

The terms ‘husband and wife’ now include an individual married to a person of the same sex if they were lawfully married in a state whose laws authorise the marriage of two individuals of the same sex, and the term ‘marriage’ includes such marriages of individuals of the same sex.

Under Rev. Rul. 2013-17, same-sex couples will be treated as married for all federal tax purposes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming

Who is not covered?

The ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognised under state law. For federal tax purposes, the term ‘marriage’ does not include registered domestic partnerships, civil unions, or other similar formal relationships recognised under state law that are not denominated as a marriage under that state’s law.

Frequently asked questions

Updated FAQs for same-sex couples and registered domestic partners and individuals in civil unions are available on the IRS website.

 

Anne S. Lewis, Esq. is the senior manager of payroll information resources for the American Payroll Association (APA), which provides payroll education, publications and training. This non-profit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 22,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C. 

 

The Internal Revenue Service( IRS) has announced that same-sex couples, legally married in jurisdictions that recognise their marriages, will be treated as married for federal tax purposes. This applies regardless of whether the couple lives in a jurisdiction that recognises same-sex marriage or a jurisdiction that does not recognise same-sex marriage.

The IRS ruling implements federal tax aspects of the June 26 U.S. Supreme Court decision in U.S. v. Windsor invalidating section three of the Defense of Marriage Act. The IRS has also posted FAQs on its website that include some guidance for employers in dealing with situations where employees used aftertax dollars to pay for health insurance benefits for same-sex spouses.

Background to Rev. Rul. 58-66

More than 50 years ago, Rev. Rul. 58-66 (1958-1 C.B. 60) addressed how to determine the marital status for federal income tax purposes of individuals who have entered into a common-law marriage (not solemnised, but created by an agreement to marry followed by cohabitation - not valid in many states) in a state that recognises such marriages. Under that ruling, the IRS has long recognised marriages based on the laws of the state in which they were entered into, without regard to subsequent changes in domicile – in order to achieve uniformity, stability, and efficiency in the application and administration of the internal revenue code.

Rev. Rul. 2013-17 builds on existing rule

The new ruling follows this line of reasoning, explaining that 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.

For federal tax purposes, the IRS now recognises the validity of a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile. Note that 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 will be covered by this ruling.

The terms ‘husband and wife’ now include an individual married to a person of the same sex if they were lawfully married in a state whose laws authorise the marriage of two individuals of the same sex, and the term ‘marriage’ includes such marriages of individuals of the same sex.

Under Rev. Rul. 2013-17, same-sex couples will be treated as married for all federal tax purposes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming

Who is not covered?

The ruling does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognised under state law. For federal tax purposes, the term ‘marriage’ does not include registered domestic partnerships, civil unions, or other similar formal relationships recognised under state law that are not denominated as a marriage under that state’s law.

Frequently asked questions

Updated FAQs for same-sex couples and registered domestic partners and individuals in civil unions are available on the IRS website.

 

Anne S. Lewis, Esq. is the senior manager of payroll information resources for the American Payroll Association (APA), which provides payroll education, publications and training. This non-profit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 22,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C.