IRS Issues Revenue Ruling Regarding Same Sex Marriage Recognition for Federal Tax Purposes – Pretax Benefits
In compliance with the Supreme Court’s ruling earlier this summer, the IRS has issued Revenue Ruling 2013.17 (http://www.irs.gov/pub/irs-drop/rr-13-17.pdf) which provides that legally married same sex couples are entitled to the same tax benefits as married heterosexual couples. Even though Florida does not recognize same sex marriages, under the IRS ruling same sex couples will be eligible for the same tax benefits as heterosexual married couples if the same sex couple was married in a state recognizing such marriages. Under the ruling, same sex couples are entitled to the same tax advantages as married couples under the Internal Revenue Code which includes pretax treatment of employee benefits. Note that the Revenue Ruling does not apply to domestic partnerships or civil unions, only a marriage that is legally recognized by a state. So long as the same sex couple was married in a state that recognizes same sex marriage, a subsequent move to a state that does not recognize same sex marriage does not affect the couple’s entitlement to favorable tax treatment under the code. While it will take some time for the word to spread regarding the Revenue Ruling, employers can take steps now to prepare by reviewing their benefit enrollment forms and payroll processes to determine what will need to be changed in order to provide pretax benefits to same sex couples when approached by an employee who is married to a same-sexed individual.