IRS Rules All Legal Same-sex Marriages Count Now – Even Retroactively

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By Robert W. Wood  

Wood LLP, San Francisco, CA

1  

The IRS has taken lots of hits lately, but this is welcome news
for same-sex couples, those considering marriage, and the tax
preparation community that has long been scratching its collective
head. Now it's official. The IRS says anyone who is legally married
is married for federal tax purposes. See Treasury Department
Press Release.

It doesn't matter whether you live in a jurisdiction that
recognizes your marriage. Treasury Secretary Jacob J. Lew said,
"This ruling also assures legally married same-sex couples that
they can move freely throughout the country knowing that their
federal filing status will not change." See Legal Same-Sex
Marriage Recognized For Federal Tax Purposes, IRS, Treasury
Say

The IRS will apply this sea change September 16th, though you
can actually amend for prior years as noted below. 
See Rev. Rul. 2013-17, 2013-38 I.R.B. 201. The IRS
also released a set of Frequently Asked Questions.

It's not just income taxes covered by this change.  This
ruling covers income and gift and estate taxes. It applies anywhere
marriage is a factor, so things like:

  •   filing status;
  •   claiming personal and dependency exemptions;
  •   taking the standard deduction;
  •   employee benefits;
  •   contributing to an IRA;
  •   claiming the earned income tax credit or child tax
    credit; and
  •   employees who purchased same-sex spouse health insurance
    coverage from their employers on an after-tax basis may treat the
    amounts as pre-tax and excludible from income.

While all marriages are covered, the ruling
doesn't cover registered domestic partnerships, civil unions, or
similar formal relationships recognized under state law. For
registered domestic partners who live in community property states,
click here.

Legally-married same-sex couples generally must file 2013
federal income tax returns as "married filing jointly" or "married
filing separately." If you were in a same-sex marriage in the past,
you may-but aren't required-to file original or amended returns
with married status for any years still open under the statute of
limitations.

Rev. Rul. 2013-17 applies starting on September 16, 2013, but
the IRS says you can go ahead with refund claims for prior open
years even before that date. There's an interesting serendipity
about this September 16 date. After all, if your 2012 tax return is
on extension from April 15, your filing deadline is October 15,
2013. Through September 15, you can chose to file your 2012 return
either as married or not married. That's a one-time unique
choice.

As to the past, in general, the statute for filing a refund
claim is three years from when you filed or two years from the date
the tax was paid, whichever is later. That means refund claims are
fair game for 2010, 2011, and 2012. If you want to file a refund
claim for income taxes, use Form 1040X.

If you want to file a refund claim for gift or estate taxes,
file Form 843, Claim for Refund and Request for
Abatement.
 For filing an amended return, see IRS Tax
Topic 308, Amended Returns.

Employers can expect streamlined procedures to file refund
claims for payroll taxes paid on previously-taxed health insurance
and fringe benefits provided to same-sex spouses. For cafeteria
plans, qualified retirement plans and other tax-favored
arrangements, the IRS will also say more shortly.

For more information in the Tax Management Portfolios, see
Maule, 503 T.M.
, Deductions: Overview and Conceptual Aspects,
and Maule, 506 T.M., Tax Credits: Concepts and
Calculation, and in Tax Practice Series, see ¶3310, Computation
of Tax - Individuals.

© 2013 Robert W. Wood

Originally published by
Forbes.com.
 

Copyright©2013 by The Bureau of
National Affairs, Inc.



  1 Robert W. Wood is a tax lawyer with a nationwide
practice (www.WoodLLP.com). The author of more than 30 books
including Taxation of Damage Awards & Settlement
Payments
(4th Ed. 2009 with 2012 Supplement,
www.TaxInstitute.com), he can be reached at Wood@WoodLLP.com. This
discussion is not intended as legal advice, and cannot be relied
upon for any purpose without the services of a qualified
professional.