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Same-Sex Marriages Are Recognized for Federal Tax Purposes

The U.S. Department of Treasury and the IRS have ruled that, effective as of September 16, 2013, same-sex couples who are legally married in a jurisdiction that recognizes same-sex marriage must be treated as married for all federal tax purposes. Accordingly, married same-sex couples must file their 2013 federal income tax returns as either “married filing jointly” or “married filing separately.” They may also choose to file original or amended federal tax returns for 2010, 2011, and 2012 and claim refunds. Some taxpayers may be eligible to claim refunds for earlier tax years.

This significant change to federal tax law is relevant to all federal tax issues where marriage is a factor, including filing status, personal and dependency exemptions, standard deductions, employee benefits and IRA contributions, credits such as the earned income tax credit and the child tax credit, and gift and estate taxes. Many employers’ employee benefit programs will be affected by the new rules, particularly in the area of health insurance and retirement benefits. In particular, employers may need to update their retirement plans and other employee benefit programs, and may be entitled to refunds of payroll taxes if they have sold benefits to same-sex spouses on an after-tax basis.

The IRS and the states will likely issue additional guidance as they determine how to implement the new federal rules and how the new federal rules affect state tax issues.

Categories: Tax


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