As set out in Revenue Ruling 1958-66, “the marital status of individuals as determined under state law is recognized in the administration of the Federal income tax laws.” This Revenue Ruling recently raised questions regarding how it applies to same-sex marriage.
The Internal Revenue Service provided answers to those questions in its Revenue Ruling 2013-17, which will be applied starting September 16, 2013.
In its Revenue Ruling 2013-17, the IRS stated that it recognizes same sex marriage and concluded that:
” Gender-neutral terms referring to marital status, such as ‘spouse’ and ‘marriage,’ include, respectively, (1) an individual married to a person of the same sex if the couple is lawfully married under state law, and (2) such a marriage between individuals of the same sex. ”
The reading of those terms is consistent with the Windsor case. The IRS also concludes that the terms “husband and wife,” “husband,” and “wife” should be interpreted to include same-sex spouses.
The IRS indicated that it recognizes same-sex marriages if it was validly entered into in a state where the marriage of two individuals of the same sex is authorized by law. It is not relevant that the state in which the spouses are domiciled does not recognize the validity of same-sex marriages.
However, for federal tax purposes, the IRS concluded that:
” The term ‘marriage’ does not include registered domestic partnerships, civil unions, or other similar formal relationships recognized under state law that are not denominated as a marriage under that state’s law, and the terms ‘spouse,’ ‘husband and wife,’ ‘husband,’ and ‘wife’ do not include individuals who have entered into such a formal relationship.” (Regardless of whether individuals are of the opposite sex or the same sex)
This Revenue Ruling will impact same-sex couples in different ways and will be applied 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.”