IRS issues guidance regarding the Windsor decision’s application to qualified retirement plans
On 4 April 2013, the US Internal Revenue Service (IRS) issued Notice 2014-19 addressing how retirement plans, qualified under section 401(a) of the Internal Revenue Code of 1986, as amended, must treat the marriages of same-sex couples in light of the Supreme Court’s decision in United States v Windsor 133 S.Ct. 2675 (2013) and giving guidance about what affected plans must say and by when.
In Windsor, the Supreme Court invalidated a section of the Defense of Marriage Act (DOMA) that defined marriage under federal law as a union between one man and one woman and defined a spouse as a person of the opposite sex. Soon after the Windsor decision, the service issued Revenue Ruling 2013-17, which held that for federal tax purposes the terms spouse, husband and wife include an individual married to a person of the same sex if the individuals were lawfully married under state law authorising same-sex marriage (the ‘state of celebration rule’). Based on the ruling, the state of celebration rule applies even if the couple’s state of domicile does not recognise the validity of same-sex marriages — but it does not extend the definition of marriage to include domestic partnerships or civil unions. The ruling applies for all federal tax purposes, including those related to employee benefit plans, prospectively as of 16 September 2013…
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