The Internal Revenue Service has issued a ruling clarifying the federal tax status of same-sex couples after the Supreme Court’s Windsor decision last spring. In Windsor, the Court held that a decedent’s estate was entitled to the estate tax marital deduction with respect to property left to the decedent’s same-sex spouse where the couple’s marriage was recognized by local law. In arriving at this result, Windsor held §3 of the federal Defense of Marriage Act, which, for purposes of federal law defined marriage as “only a legal union between one man and one woman as husband and wife” and “spouse” as referring “only to a person of the opposite sex who is a husband or a wife” unconstitutional.
The ruling includes three interpretations. First, it states that for federal tax purposes the terms ” spouse,” ” husband and wife,” ” husband,” and ” wife” include an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term ” marriage” includes such a marriage between individuals of the same sex.
Second, the ruling provides that for federal tax purposes, a marriage of same-sex couples will be recognized if the marriage was validly entered into in a state whose laws authorize the marriage of two individuals of the same sex even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages. For example, a same-sex couple who were legally married in New York where such marriages are legal will be treated as married for federal tax purposes even if they subsequently move to Virginia where same-sex marriages are not recognized.
Finally, the ruling provides that for federal tax purposes the terms ” spouse,” ” husband and wife,” ” husband,” and ” wife” do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state. Moreover, the term ” marriage” does not include such formal relationships.
The ruling becomes effective September 16, 2013. Any original federal income tax return filed on or after that date (including a late 2012 federal income tax return, whether or not filed late pursuant to an extension) by a person who is married under the ruling must be filed using the status “married filing jointly” or “married filing separately.” Persons who previously filed returns as unmarried may, but are not required to, file amended returns for back years for which they were married as defined by the ruling and for which the statute of limitations for filing refund claims remains open (the statute generally closes three years after the original return was filed).
The ruling has no effect on the status to be used in filing state tax returns.