The United States Internal Revenue Service (IRS) and the Treasury Department has stated that ‘husband’ and ‘wife’ would not be limited to opposite-sex couples but to same-sex couples too.
The tax authorities have disclosed that they will now recognize same-sex unions regardless of where they are performed. The decision of the IRS is in line with the Supreme Court ruling in June 2015 to legalize gay and lesbian marriages across all states.
The US top court ruled 5-4 to okay same-sex marriages, stating that the Constitution provided a right to same-sex marriage. Before the ruling however, there were 13 states that did not recognize same-sex marriages.
Since the ruling, most federal agencies were updating their regulations to reflect the court’s orders.
According to Treasury Secretary Jacob Lew, the regulations would ensure “that all are treated equally under the law.”
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“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,” he added.
Before now, the IRS had given recognition for same-sex marriage for tax purposes since 2013 but only in states that had passed legislation to that effect. But with the Supreme Court ruling, it is legal across all states.
The IRS further noted that the (same-sex) regulations would apply to all federal tax provisions in which marriage is a factor, including filing status, exemptions, the standard deduction and employee benefits.
They are quick to state however that, the proposed regulations would not apply to domestic partnerships, civil unions or similar relationships.
Huge tax savings are made by couples whose spouse relies on the other for employer-provided health insurance. Employer-provided health insurance is tax-free for the vast majority of workers, married spouses and dependent children, by law.
But an unmarried partner would be required to pay taxes to the government even if their partners are covered by their employers.
