IRS “Place of Celebration” Rule For Same-Sex Marriages Expands Rights and Simplifies Plan Administration

On August 29, the IRS and Treasury issued their first wave of guidance regarding the impact of United States v. Windsor – in which the Supreme Court declared section 3 of the Defense of Marriage Act (“DOMA”) unconstitutional – under the Internal Revenue Code. Revenue Ruling 2013-17 (the “Ruling,”), along with two sets of “Frequently Asked Questions,” provide important guidance on two key open issues – the definition of “spouse,” and the effective date of the decision, for Federal tax purposes.

As more fully described in the attached memo, “spouse” is defined broadly in the Ruling to include all same-sex marriages that were performed in a domestic or foreign jurisdiction having the legal authority to sanction marriages – the “place of celebration” principle – without regard to the state law where the spouse is domiciled.

The decision is effective prospectively as of September 16, 2013 (with an optional retroactive effective date for payroll and tax refunds within the statute of limitations). The IRS also promises to issue additional guidance regarding the impact on qualified plans, cafeteria plans, and a streamlined payroll refund process for employers, and issues surrounding possible retroactivity. Our comments on this IRS guidance follow in the attached memo.

View the Memo.