August 29, 2013

Wyden: All Legal Same-Sex Marriages Now Recognized for Federal Tax Purposes

Affected Couples May be Eligible for Past-Years’ Tax Refunds

WASHINGTON — U.S. Sen. Ron Wyden, D-Ore., today applauded a ruling by the U.S. Department of the Treasury and the Internal Revenue Service (IRS) that all legally married same-sex couples will be treated as married for federal tax purposes.

“Today’s ruling is another step toward ensuring that every American gets the same rights, responsibilities, protections and benefits no matter who they love and share their lives with,” Wyden said. “This will directly impact families’ financial health, and assures legally married same-sex couples that their federal tax status will not depend on where they live.”

Under the ruling, same sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Legally-married same-sex couples generally must file their 2013 federal income tax return using either the “married filing jointly” or “married filing separately” filing status.

Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.   

Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011, and 2012. Some taxpayers may have special circumstances (such as signing an agreement with the IRS to keep the statute of limitations open) that permit them to file refund claims for tax years 2009 and earlier.

Additionally, 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 and excludable from income.

Treasury and the IRS will begin applying the terms of Revenue Ruling 2013-17 on September 16, 2013, but taxpayers who wish to rely on the terms of the Revenue Ruling for earlier periods may choose to do so (as long as the statute of limitations for the earlier period has not expired).

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. The ruling implements federal tax aspects of the June Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.