Federal Tax Treatment for Same-Sex Marriages
- U.S. Supreme Court Ruling
- IRS Ruling 2013-17
- Benefit plan impact
- Alaska application of Revenue Ruling
- FAQs for same-sex individuals who are married under state law
U.S. Supreme Court Ruling
On June 26, 2013, the United States Supreme Court, in a case captioned U.S. v. Windsor (Windsor), ruled that Section 3 of the Defense of Marriage Act (DOMA), which provided that only persons of the opposite sex could be recognized as "spouses" and "married" for purposes of federal law, was unconstitutional.
The Internal Revenue Service (IRS) issued Revenue Ruling 2013-17 [PDF] on August 29, 2013, providing guidance as to how the IRS will treat same-sex married couples under the Internal Revenue Code post Windsor. In accordance with Windsor and Revenue Ruling 2013-17, for federal tax law purposes only, the IRS will recognize a marriage between same-sex individuals that was validly entered into in a state whose laws authorize the marriage of two individuals of the same sex regardless of whether or not those married individuals currently reside in a state that recognizes same-sex marriage. However, the IRS will not consider individuals who have entered into a registered domestic partnership, civil union, or similar arrangements as married for federal tax law purposes.
Benefit Plan Impact
The Windsor decision and Revenue Ruling 2013-17 impact employee and retiree benefit plans. For example, prior to the Windsor decision, DOMA effectively required that benefits provided to a same-sex spouse were generally subject to federal income tax and that same-sex spouses were not considered qualified beneficiaries under COBRA, and thus could not be afforded COBRA continuation coverage when the participant terminated employment, divorced, or entered into a legal separation. Under Windsor and Revenue Ruling 2013-17, these and approximately 1,300 other federal laws governing employer-sponsored retirement and health and welfare benefits plans were affected.
State of Alaska Application of Revenue Ruling 2013-17
In order to ensure the State of Alaska, Department of Administration, Division of Retirement and Benefits (Division) is appropriately applying the correct federal tax treatment to your benefits, it is necessary for the Division to obtain same-sex marriage information from affected participants. Notices requesting enrollment of married spouses were sent to all affected members and employees in late October, 2013. Enrollment of a same-sex spouse is the responsibility of the member.