IRS Issues Revenue Ruling on Federal Recognition of Same Sex Marriage

9/3/2013 | Written by: Karen Reed, EA

On August 29th, the IRS and Treasury Department issued a Revenue Ruling on the federal tax aspects of the June Supreme Court decision regarding the Defense of Marriage Act (DOMA), which declared DOMA unconstitutional. The guidance answers some of the questions raised by the decision, including which same-sex couples will be considered legally married for federal tax purposes, and whether or not the treatment applies to prior year tax returns.

According to the new ruling, marital status will be based on the laws of the state where a marriage is initially established. Therefore, same sex couples who were legally married in the U.S. or in a foreign country will be considered married for purposes of federal income, estate and gift taxes, even if they reside in a state that does not recognize same sex marriage. Taxpayers in registered domestic partnerships, civil unions and other types of state-recognized relationships will not be treated as married persons under federal law.

Beginning with  2012 tax returns filed on or after September 16, 2013, same sex couples who are legally married generally will be required to file their income tax returns using either the “married filing jointly” or “married filing separately” statuses. In some situations, married taxpayers can be considered “unmarried for tax purposes” and file using the Head of Household filing status.

Legally married couples will be able to file amended returns for prior tax years during which they were married and that fall within the statute of limitations for amended returns. This includes 2012 tax returns filed prior to September 16, 2013. The statute of limitations period is generally three years from the date the return was originally filed or two years from the date the tax was paid, whichever is later.

Filing amended returns is not a requirement, but a choice couples should make based on an analysis of changes in the tax situation. A change in marital status affects many areas of the federal tax return, including filing status, exemptions, deductions, IRA contributions, tax credits, and employee benefits. Employees who were not allowed to purchase health insurance coverage for a spouse on an after-tax basis in prior years may find it particularly advantageous to file amended returns.