The Treasury Department and the Internal Revenue Service proposed tax regulations Wednesday to bring the rules in line with recent Supreme Court decisions.
The proposed regulations provide that a marriage of two individuals, whether of the same sex or the opposite sex, will be recognized for federal tax purposes if that marriage is recognized by any state, possession, or territory of the United States. The proposed regulations would also interpret the terms “husband” and “wife” to include same-sex spouses as well as opposite-sex spouses. These regulations implement the Supreme Court’s decision earlier this year in the case of Obergefell v. Hodges. They would also clarify and strengthen guidance provided in a 2013 IRS revenue ruling implementing the Supreme Court’s decision in another landmark case, United States v. Windsor. That revenue ruling said same-sex couples legally married in jurisdictions that authorize same-sex marriage will be treated as married for federal tax purposes. The proposed regulations update these rules to reflect that same-sex couples can now marry in all states and that all states will recognize these marriages.
“The proposed regulations confirm that terms in the federal tax code relating to marriage should be interpreted to include same-sex spouses as well as opposite-sex spouses, ensuring that all are treated equally under the law,” said Treasury Secretary Jack Lew in a statement. “These regulations provide additional clarity on how the federal government will treat same-sex couples for tax purposes in light of the Supreme Court’s historic decision on same-sex marriage.”
The proposed regulations would apply 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.
The proposed regulations would not treat registered domestic partnerships, civil unions or similar relationships not denominated as marriage under state law as marriage for federal tax purposes. This rule protects individuals who have specifically chosen to enter into a state law registered domestic partnership, civil union, or similar relationship rather than a marriage, because they can retain their status as single for federal tax purposes.
Since the publication of the 2013 revenue ruling, legally married couples generally must file their federal income tax return using either the “married filing jointly” or “married filing separately” filing status, the Treasury noted.
Rep. Sander Levin, D-Mich., the ranking Democrat on the tax-writing House and Ways Means Committee greeted the proposed regulations.
“All Americans should be treated equally under the law, and today’s announcement by the Treasury Department will help solidify marriage equality in our nation’s Tax Code—ensuring all married couples are treated with the respect and fairness they deserve,” he said in a statement.
In July, Levin introduced legislation—similar to Treasury’s proposed regulations announced today—which would clarify equal treatment for all married couples under the U.S. Tax Code to ensure it is consistent with a recent U.S. Supreme Court decision that same-sex couples have a constitutional right to marry.
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