By: E. Martin Davidoff, CPA, Esq. | In July, I wrote about how the United States Supreme Court found Section 3 of the Defense of Marriage Act (DOMA) to be unconstitutional failing to recognize state-authorized same sex marriages. This article addresses a series of questions I had raised, set forth below, that have now been addressed by the IRS in Revenue Ruling 2013-17, announced by IR-2013-72 on August 29, 2013.
Q. How couples legally married in a state that recognizes same-sex marriages [1] will be treated if they reside in states that do NOT recognize same sex marriages.
A. They will be deemed married for federal income and estate tax purposes. Also, foreign same sex marriages will be recognized.
Q. Can married same-sex couples amend past returns to get refunds?
A. Yes, for all open years, which currently includes at least 2010, 2011 and 2012
Q. Must married same-sex couples amend past returns to pay additional tax if such tax is due?
A. No, the filing of amended returns for years prior to 2013 is optional. However, commencing in 2013 returns must be filed as married (either married filing jointly or married filing separately).
Q. What is the impact of state same-sex relationship laws other than full marriage as six states currently provide? [2]
A. Same-sex couples having formalized their relationships in these states will NOT be deemed married for federal tax purposes. The IRS news release states:
1. “Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.”
2. Employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax dollars that are excludable from income. Accordingly, such Taxpayers may file claims for refund.”
3. “Treasury and the IRS intend to issue streamlined procedures for employers who wish to file refund claims for payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses. Treasury and IRS also intend to issue further guidance on cafeteria plans and on how qualified retirement plans and other tax-favored arrangements should treat same-sexspouses for periods before the effective date of this Revenue Ruling.”
Kudos to the IRS for providing such comprehensive and reasonable guidance so quickly.
1 As of July, 2013, eleven states (California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont and Washington), the District of Columbia, and five Native American tribes have legalized same-sex marriages. As of August 1, 2013, the states of Rhode Island and Minnesota permitted same-sex marriages. Prior to 2004, same-sex was not allowed in any U.S. jurisdiction.
2 New Jersey, Oregon, Nevada, Illinois, Hawaii, and Colorado.
For more information, see IR-2013-72 at http://www.irs.gov/uac/Newsroom/Treasury-and-IRS-Announce-That-All-Legal-Same-Sex-Marriages-Will-Be-Recognized-For-Federal-Tax-Purposes;-Ruling-Provides-Certainty,-Benefits-and-Protections-Under-Federal-Tax-Law-for-Same-Sex-Married-Couples), Revenue Ruling 2013-17 and FAQs for Registered Domestic Partners and Individual in Civil Unions referenced in IR-2013-72. Also, see the new FAQs for same sex marriages: http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-Same-Sex-Married-Couples.
E. Martin Davidoff, CPA, Esq. is the founder of the Dayton, New Jersey firm of E. Martin Davidoff & Associates, CPAs and has more than 30 years of experience practicing as a CPA and tax attorney. Davidoff is the founder of the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and currently serves on the Executive Committee of the AAA-CPA. Mr. Davidoff may be reached at
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