The U.S. Department of the Treasury and the Internal Revenue Service (IRS) Thursday said the equivalent of "I do" to same-sex couples when they announced their recognition of their marriages for federal tax purposes. Same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married if they are married in a jurisdiction that recognizes same-sex marriages and subsequently live in a jurisdiction that does not recognize same-sex marriage.
In a May Gallup survey, 53 percent of Americans said the law should recognize same-sex marriages, the third consecutive reading of 50 percent or above in Gallup polling over the past year.
The ruling implements federal tax aspects of the June 26 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.
This exact scenario happened to a Cincinnati couple who flew to Maryland to marry for the day and then returned home to Ohio where same-sex marriage is prohibited. On July 11, 2013, Arthur and Obergefell traveled to Maryland in a special jet equipped with medical equipment and a medical staff necessary to serve Arthur’s needs, whereupon they were married in the jet as it sat on the tarmac in Anne Arundel County, Maryland, a state that voted last year to permit same-sex marriage. They newly marriage couple returned to Cincinnati that same day
The court wrote in a 15-page ruling that the case is simple. The issue, it said, is whether the State of Ohio can discriminate against same sex marriages lawfully solemnized out of state, when Ohio law has "historically and unambiguously provided that the validity of a marriage is determined by whether it complies with the law of the jurisdiction where it was celebrated."
Statewide Ohio officials did not accept the ruling and continue to push back on it.
Under the ruling, the IRS said 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.
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.
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.
Gallup reported that in 1996, about the time President Bill Clinton signed the Defense of Marriage Act that denied federal government recognition of same-sex marriages, Americans were decidedly against legalizing gay marriage. Public opinion on the issue since then has changed significantly, and now it appears a stable majority, now including Treasury and the IRS, is in favor of allowing same-sex couples to legally marry.
Growing public support has helped promote a change in many states' laws, Gallup reported. States that have passed gay marriage laws tend to be the most politically Democratic and liberal states, so a real tipping point may be the fate of gay marriage in the more politically moderate or competitive states, many of which passed constitutional amendments to ban same-sex marriage in the 2004 elections.
Subscribe. It's ALWAYS free. Send news or tips to firstname.lastname@example.org. join me on Google+, Pinterest or Twitter, or watch my YouTube videos.