September 3, 2013
By Larry Cary
Couples to be considered legally married regardless of whether state of residence recognizes the marriage..
The Internal Revenue Service just announced that Federal tax law treatment of same-sex married couples will disregard whether the state of a couple's residence legally recognizes the same-sex marriage. Instead, federal tax law will look to the state or the country where the marriage took place to determine whether the couple is to be treated as married for federal tax purposes. In other words, once legally married by state or country, a same-sex married couple will be treated as married even if they reside in a state that does not recognize same-sex marriage.
Under this rule, same-sex married couples will be treated as married for all federal tax purposes, including but not limited to tax filing status, the use of deductions and exemptions, employee benefits, contributing to an IRA and other matters as well.
Legally married same-sex couples must now either file jointly as married or married filing separately. Domestic partnerships and civil unions do not qualify for this treatment.
Married same-sex couples who were married in 2010, 2011 and 2012 may qualify to amend their tax returns and seek refund claims for those years. It is expected that further regulations will be issued to cover the retroactive tax treatment of health benefits provided married same-sex couples in these prior years. In the mean time, labor-management pension and welfare benefit plans should review their plan documents to make sure that the language properly covers same-sex married couples for benefits regardless of the law of the state they are currently residing in.
Larry Cary is a partner in Cary Kane LLP a union side labor law firm. He has been counsel to labor-management pension and welfare plans for 30 years.