IRS Issues Ruling on Tax Issues for Same Sex Marriages


In the landmark ruling by the Supreme Court on June 26, 2013, section 3 of the Defense of Marriage Act (DOMA) was ruled to be unconstitutional.  This ruling allowed same sex marriages to be recognized under federal law.  Previously, states could decide if they would recognize same sex marriages, but they were not recognized federally.

This decision created many questions without immediate answers, including how this would impact tax requirements and employee benefits.

In Revenue Ruling 2013-17 the IRS has ruled that same sex marriages will be recognized at the federal level for tax purposes even if the state the couple resides in does not recognize same sex marriages.  This will apply to marriages that were legally performed in any of the 50 states, the District of Columbia, foreign territories, and foreign countries.   The ruling states that this will not apply to domestic partnerships, common law marriages or similar unions recognized under state law.

Revenue Ruling 2013-17 provides guidance on how to accommodate various aspects of federal tax requirements, including tax returns, claiming dependents, and health insurance paid for by a spouse on an after-tax basis.

The ruling also provides clarification on the definition of spouse, husband, and wife as it is used in the code. The ruling states that where these terms are used, the terms will now include spouses, husbands and wives in same sex marriages.  Taxpayers may rely upon this guidance when filing original and amended tax returns for open tax years, claims for repayment under section 106, 125, and 129 plans, or refunds for overpayment on income and employment taxes.

The IRS stated in the ruling that guidance regarding other employee benefits plans will be issued.

It is not clear at this time how plan documents will be affected, and if document updates will be necessary to comply with the new ruling.

The guidance issued by the IRS in this revenue ruling will be effective beginning September 16, 2013.

With this new ruling in mind, expenses for same sex spouses may now be claimed from pretax benefit plans such as Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Dependent Daycare Accounts.  Employers may also allow for election changes under a cafeteria plan if there is the addition of a spouse based on this revenue ruling.

As further guidance is issued, we will continue to keep you updated on how this will impact your FSA, HRA or HSA plans.  You may access Rev. Rul. 2013-17 by following the below link

Your dedicated myCafeteriaPlan Account Representative is also available to help answer any questions you may have regarding your specific plan.