On August 29, the Internal Revenue Service (IRS) issued Revenue Ruling 2013-17 providing guidance on the effect of the U.S. Supreme Court's decision in United States v. Windsor. In Windsor, the Supreme Court struck down the portion of the Defense of Marriage Act (DOMA) defining "marriage" as exclusively the union between a man and a woman and "spouse" as a person who is married to someone of the opposite sex. (See our prior Client Alert, DOMA Unconstitutional: Impact on Employee Benefits Plans.)
What Does Revenue Ruling 2013-17 Provide?
The Revenue Ruling provides much-anticipated answers to the question of how the Windsor decision affects tax administration. For federal tax purposes, the terms "spouse," "husband and wife," "husband," and "wife" now include an individual married to a person of the same sex, and the term "marriage" now includes a marriage between individuals of the same sex, as long as the individuals were married under any domestic or foreign law that authorized the marriage of two individuals of the same sex, even if the couple now lives in a state that does not recognize same-sex marriages. For example, a same-sex couple who married in New York but now resides in New Jersey will be considered married for federal tax purposes. However, the term "same-sex couple" does not include individuals who have entered into a registered domestic partnership, civil union, or other similar form of relationship not denominated as a marriage under domestic or foreign law.
Action Steps for Sponsors of Employee Benefits Plans
The Revenue Ruling has broad, immediate implications for employers sponsoring group medical and qualified retirement plans -- e.g., Section 401(k) plans and pension plans.
With respect to medical plans, employers should immediately coordinate with payroll to do the following:
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