When we last wrote about the Supreme Court’s decision ruling that the 1996Defense of Marriage Act (DOMA) was unconstitutional, we were awaiting word from the United States government with regard to how the ruling would impact federal regulations.
The U.S. Department of the Treasuryand the Internal Revenue Service(IRS) has now ruled that same-sex couples who were 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 a jurisdiction that does not recognize same-sex marriage, such as Pennsylvania.
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.
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.
At Lehigh, we will continue to offer benefits to domestic partners; however as noted in the Treasury Department’s ruling, those benefits will still be taxable. That’s why it’s important to let Human Resources know if you are in a legally recognized same sex marriage and plan to file federal tax returns as a married couple.
Once you have notified HR, the benefits team can then discontinue taxation on the the value of your spouse’s benefits. Given the changes to eligible exemptions and deductions, you may also wish to submit an adjusted IRS W-4 (withholding) form to the Payroll Office. Consult your personal tax professional if you have specific questions about your tax returns.