In a previous article (“Tax Implications Resulting from Demise of the Defense of Marriage Act (DOMA)”; August 15, 2013) I explained that the Treasury Department issued a revenue ruling that permits legally married same-sex couples to file a joint federal tax return and utilize the unlimited martial deduction for estate tax purposes and other provisions of the estate and gift tax laws if the state in which they resided sanctioned such unions. If they moved to a state that does not recognize same-sex marriages, they would not be allowed to utilize these provisions.

New Revenue Ruling

On August 29, the Treasury Department issued a new revenue ruling [Rev Rul 2013-17] expanding the previous one. The new ruling will now allow legally same-sex married couples to file a joint return and utilize the unlimited martial deduction for estate tax purposes and other provisions of the estate and gift tax laws even if they move to a state that does not sanction same-sex marriage. In his statement announcing the new ruling, Treasury Secretary, Jacob B. Lew, stated: “today’s ruling provides certainty and clear, coherent tax-filing standards for all same-sex married couples nationwide. This ruling also assures all legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change.”

The Treasury Department further stated that the revenue ruling applies to “all federal tax provisions where marriage is a factor [emphasis added] 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 [and the child-tax credit].”

The Treasury’s revenue ruling applies to all legal marriages occurring in any of the 50 states, the District of Columbia, a U.S. territory or a foreign country. It applies even if the state in which the couple currently resides does not recognize same-sex marriages. But it does not apply in cases of civil unions, registered domestic partnerships or other similar formal relationships recognized under state law. Such individuals may, but aren’t required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior years still open under the statute of limitations (three years from the due date of the original return) if they were legally married during that year [Alistair M. Nevius, J..D. Journal of Accountancy on-line edition, August 29, 2013. http://www.journal of accountancy.com/News/20138636.htm].

The Treasury Department indicated that the ruling will be applied prospectively, effective September 16, 2013, but taxpayers who wish to rely on it for earlier periods for which the statute of limitations has not expired, may do so.

Taxpayers in same sex marriages should consult their tax adviser for more information on how this revenue ruling may apply to and benefit them.

In accordance with Circular 230 Disclosure