We recently posted about the anticipated guidance on how same-sex marriages will be treated for federal tax purposes. The U.S. Treasury Department and Internal Revenue Service (IRS) have now provided that guidance. Revenue Ruling 2013-17 is effective September 16, 2013, but can be relied upon prior to that date.
For federal tax purposes, including for federally governed employee benefits, a same-sex couple will be treated as married if the so-called “state of celebration” or “state of ceremony” rule is met. Under the rule, if a same-sex couple is legally married in a state or country that authorizes same-sex marriage, then the marriage is recognized as legal throughout the United States, regardless of where the couple lives or works. Civil unions and domestic partnerships will not be recognized as marriage for federal tax purposes. The IRS website has posted frequently asked questions regarding same-sex couples as well as domestic partners for additional information.
While waiting for additional guidance, employers can take steps to implement the recent Treasury and IRS guidance. Employers should evaluate their current processes and work with employees to identify same-sex spouses based on the state of celebration rule. Additionally, employers should review their plan definitions of spouse, civil union and domestic partner and revise them as needed.