IRS: Treat Same-Gender Spouses the Same

In an IRS Revenue Ruling issued Aug. 29, Treasury Secretary Jacob Lew announced that as a result of the Supreme Court’s June 26 decision striking down Section 3 of the Defense of Marriage Act, the IRS has established a uniform policy, effective Sept. 16, 2013, regarding the recognition of same-gender spouses.
 
A couple’s “state of celebration,” rather than the state of residence, will be the determining factor in the federal recognition of same-gender marriages, a policy that extends to qualified retirement plans. Under the ruling, qualified plans must treat a same-gender spouse as a spouse for purposes of federal tax laws if the marriage took place in one of the 13 states and the District of Columbia where same-gender marriage is currently legally recognized, or in any foreign jurisdiction with legal same-gender marriage. Individuals within registered domestic partnerships and civil unions will not be considered spouses under this policy for qualified retirement plan purposes, although employers are permitted to make domestic partners the default beneficiary.
 
In FAQs released simultaneously with the ruling, the IRS states that it will be providing additional future guidance regarding plan amendments (and timing) and necessary corrections relating to plan operations for periods prior to future guidance.
 
In addition to employee benefits, same-gender couples will be treated as married for all federal tax purposes where marriage is a factor, including estates, filing status, claiming exemptions, taking the standard deduction, contributing to an IRA and claiming tax credits.
 
Ray Harmon, Esq., is ASPPA’s Government Affairs Counsel.