IRS Recognizes All Legal Same-Sex Marriages for Federal Tax and Benefit Purposes
On August 29, 2013, the U.S. Department of the Treasury and the IRS announced that all legal same-sex marriages would be recognized for federal tax purposes, including employee benefits. The ruling applies to all federal tax provisions where marriage is a factor, and applies irrespective of whether the couple lives in a state that recognizes same-sex marriage.
What does this mean for employee benefit plans? Employee benefit plans governed by ERISA must provide the same benefits to legally married same-sex couples as it does to legally married opposite sex couples. Same-sex spouses must be provided full spousal rights in all respects, including but not limited to joint and survivor annuities, waiver and consent provisions, survivor benefits, beneficiary provisions, and qualified domestic relations orders. The IRS ruling applies only to legal marriages, and does not extend to domestic partnerships or civil unions.
What does this mean for legally married same-sex couples? Employees who purchased employer-sponsored health insurance for a same-sex spouse on a post-tax basis may be able to treat the amounts they paid for that coverage as pre-tax and excludable. The IRS is developing streamlined procedures for filing refund claims for taxes previously paid for benefits for same-sex spouses. The ruling applies to all federal tax issues where marriage is a factor, including income tax, IRA contributions, child tax credit, estate taxes, and so on. Same-sex spouses should consult their tax professionals to see if they are eligible to file claims for refunds on other federal tax issues addressed in this ruling.
For more information about how the IRS ruling could affect your plan, please contact your Trust Fund counsel.
Author: Kristina Zinnen
