New federal rules announced Thursday mean that legally married same-sex couples will be entitled to the same rights and benefits under the U.S. Tax Code as opposite-sex couples, regardless of what state they live in, BusinessInsurance reported.
Effective Sept. 16, federal tax regulations will recognize any same-sex marriage legally sanctioned by a state, U.S. territory or foreign country, even if a couple's state of residence neither permits same-sex couples to marry nor recognizes marriages performed in other jurisdictions.
Same-sex marriages have been legal in Iowa since April 2009, when an Iowa Supreme Court decision made Iowa the third state to recognize them.
The federal rules were announced two months after the U.S. Supreme Court's June 26 decision to overturn Section 3 of the Defense of Marriage Act, which had prohibited federal recognition of same-sex marriages by restricting the definition of marriage to the union of a man and a woman. The new rules apply to all federal tax provisions related to marital status, including a couple's filing status, available personal and dependency exemptions and standard deduction calculations, as well as to contributions made to individual retirement accounts and employer-sponsored health and retirement plans.
Thursday's guidance did not outline procedures for employers seeking refunds for prior payroll taxes paid on health care coverage and other employment benefits provided to same-sex spouses. The Treasury Department and IRS said they intend to issue further guidance on those procedures, as well as the retroactive treatment of legally wed same-sex couples under flexible benefit plans, qualified retirement plans and other tax-favored arrangements