Estate Planning- IRS To Recognize All Legal Same-Sex Marriages for Federal Tax Purposes
On Aug. 29, 2013, the U.S. Dept. of the Treasury and the Internal Revenue Service (IRS) issued Revenue Ruling 2013-17, ruling that same-sex couples who are legally married in jurisdictions that recognize their marriages will be treated as married for federal tax purposes.
The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or not, to ensure uniformity in application of the Internal Revenue Code.
The IRS and the Treasury issued this ruling to implement the U.S. Supreme Court’s decision on the Defense of Marriage Act (DOMA). On June 26, 2013, the Court held that same-sex couples who are legally married under state law are entitled to equal treatment under federal law with regard to income taxes and federal benefits.
Impact on Individuals
Under the ruling, same-sex couples who are legally married 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.
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.
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