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The chart, State Taxes and Married Same-Sex Couples, has been updated to reflect the fact 35 states plus the District of Columbia now allow same-sex marriage. One state (Missouri) recognizes same-sex marriages from other states. Missouri state and federal courts have both now ruled that it must allow such marriages in the state, and some jurisdictions in Missouri are allowing same-sex couples to get married there. In one state (Kansas), many counties are issuing marriage licenses to same-sex couples, but the state is still refusing to recognize such marriages for state law purposes. And in one state (Alabama), a federal court has struck down the ban on same-sex marriage, and the US Supreme Court has declined to issue a stay on the decision, but the state supreme court has issued a decision prohibiting probate judges from issuing marriage licenses to same-sex couples.
The pace of change became much more rapid after the Supreme Court denied certiorari in (refused to consider) any of the Circuit Court decisions striking down bans on same-sex marriage on October 6, and the Ninth Circuit struck down bans in Nevada and Idaho on October 7. On November 6, the Sixth Circuit upheld bans on same-sex marriage from four states (Kentucky, Michigan, Ohio, and Tennessee), creating a conflict among the Circuits. On January 16, 2015, the Supreme Court granted certiorari in the case.
Taxing authorities in all of the states that continue to have bans on same-sex marriage have announced their interpretation of the filing status that married same-sex couples must use for state income tax purposes. Moreover, there is now at least one challenge to the same-sex marriage ban in every state that has such a ban, and almost all of the decisions that have so far been issued have struck down the bans. Read more.
Immediately after the Supreme Court’s decision in United States v. Windsor, the Department of Labor announced that for purposes of the spousal protections of the Family and Medical Leave Act of 1993 (FMLA), it would recognize a same-sex marriage only if it was legal in the jurisdiction of the couple’s domicile. It has now reversed that position, issuing final regulations which recognize a marriage a) within the United States, if it was valid in the state in which it took place, and b) outside of the United States, if it was valid in the jurisdiction in which it took place and if it could have been entered into in at least one state. The effective date for the final rule is March 27, 2015.
Carol V. Calhoun was quoted in an article in Human Resources Online entitled “Fair Play… Or Not?” about companies’ actions to eliminate domestic partner benefits for unmarried employees who live in states in which same-sex marriage is now legal. With the majority of US states now allowing same-sex marriage, such actions are becoming more common. Ms. Calhoun is quoted both on why eliminating domestic partner benefits is popular among employers, and some of the pitfalls that may occur.
The chart comparing 457(b) plans, 403(b) plans, 401(k) plans, and deemed IRAs as vehicles for voluntary employee savings has now been updated to reflect recent developments, including new limits for 2015.
Carol V. Calhoun was interviewed for a piece on National Public Radio’s “Here and Now” program called, “State Tax Laws ‘A Mess,’ For Same Sex-Couples and Employers,” which aired today. You can listen to the segment at this link, a summary and transcript can be found here, and the chart referenced in the story is available at this link..
Carol V. Calhoun‘s article, “State Taxes and Married Same-Sex Couples,” has now been published in Baltimore OUTloud. This article discusses the different approaches that each of the states has taken for state tax purposes, in the wake of the federal government’s decision to treat same-sex married couples are married for federal tax purposes.
On June 26, 2013, the Supreme Court issued the Windsor decision, striking down a provision in the federal Defense of Marriage Act which had precluded recognition of same-sex marriages. In September, the Internal Revenue Service (“IRS”) announced that same-sex couples legally married in a state that recognized such marriages would now be treated as married for purposes of federal taxation, regardless of whether their marriages were recognized by their state of residence. The IRS announcement was made retroactive, meaning that such marriages will be recognized back to their inception.
The IRS has issued Notice 2014-1, which provides guidance on the application of the new rules to cafeteria plans. However, in many instances employers will need to move quickly to take advantage of relief granted.