IRS: All Same-Sex Marriages Recognized for Federal Tax Purposes

imagesThe IRS has announced that it will recognize all legal same-sex marriages for federal tax purposes, regardless of where the couple resides. Thus, even if a same-sex couple lives in or moves to a non-recognition state, such as Colorado, if they have obtained a marriage in a recognition state, then they will be treated as married for purposes of federal tax law.

The primary highlights of today’s announcement are:

– 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.

– 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.

– 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.

To read the announcement in its entirety, go here.