The IRS recently issued Rev. Rul. 2013-17 providing guidance on how the Windsor ruling (finding Section 3 of DOMA unconstitutional) affects tax issues related to same-sex marriage.
First, the IRS announced it will determine marital status based on the laws of the state or country of celebration of the marriage, not the state of residence of the affected persons. Therefore, same-sex individuals who marry in Iowa (or any other state that recognizes same-sex marriages) and live in Nebraska (or any other state that does not recognize same-sex marriages) will be considered married for federal tax law purposes.
Second, the IRS analyzed the use of the terms “husband”, “wife” and “husband and wife” in the Internal Revenue Code (Code) and indicated that it interprets those terms as gender-neutral. This interpretation permits same-sex couples to be, individually and collectively, “husband”, “wife” and “husband and wife”. The IRS will legally recognize same-sex married individuals as spouses, husbands and wives wherever those terms exist in the Code.
Third, the IRS determined that domestic arrangements not legally identified as marriage under state law will not be a marriage for purposes of the IRC. Same-sex partners in a civil union or a domestic partnership are not married for federal tax purposes.
Lastly, the IRS reviewed the timing for applying the Windsor decision. Rev. Rul. 2013-17 applies prospectively from September 16, 2013 forward. In addition, affected taxpayers may rely on the guidance for any open tax year, which will permit amending previously filed returns.
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