In Revenue Ruling 2013-17, the IRS has now had the opportunity to delve further into the question of what now since the fall of the Defense of Marriage Act? The IRS proceeded to answer a series of questions, but the most question I found addressed in RR 2013-17 was the following: Whether, for Federal tax purposes, the terms “spouse,” “husband and wife,” “husband,” and “wife” include individuals (whether of the opposite sex or same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state and whether, for those same purposes, the term “marriage” includes such relationships.” In other words, since for years the biggest commitment same-sex couples could make was entering into a “registered domestic partnership”, does the IRS now consider registered domestic partners as being married couples for tax purposes? Or do those couples now have to go actually get married to be deemed married for federal tax law? Let’s take a look at that question, and a couple others brought up by the revenue ruling.
Issue One- Are same-sex couples Who Have Actually Married Considered Married for the IRS Purposes?
Well, we know the answer to this one already. If the same-sex couple is married in any state where same sex marriage is legal, no matter what state their domicile is, they are considered married for federal tax purposes (and that’s great for estate planning, where the unlimited spousal deduction is now available for same sex spouses).
Issue Two- Are a Same-Sex Couple Who Married in a State Which Permits Same-Sex Marriage Still Considered Married for Federal Purposes if They Live in a State Which Does Not Permit Same-Sex Couples?
Well, we know the answer to this one too. State of ceremony (where the marriage occurred) is all that matters, not the state of domicile. Get married in California, live in Oklahoma, all that matters for federal tax purposes is that you were married in California, and that California permits gay marriage.
So let’s get to the question which is breaking new ground…
Issue Three- Whether, for Federal tax purposes, the terms “spouse,” “husband and wife,” “husband,” and “wife” include individuals who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state>
So you couldn’t get married for a long time in California, and you chose to be viewed as a registered domestic partner. Marriage is now legal, but you haven’t gotten around to getting married in California yet. Can you, as a registered domestic partner, be considered married for federal tax purposes (which will get you, amongst other things, a spousal deduction on the death of the first spouse (to avoid the estate tax))? This time the IRS does not help. For federal tax purposes, the term marriage does not include registered domestic partners (or civil unions). So, if you want to be considered married for federal tax purposes (which usually, but now always, is a benefit financially to a couple), you have to go get married- registered domestic partners (even though that may have been all that was available for years), will not suffice for this purpose.