There are currently 13 states that recognize and approve same-sex marriages. On August 29, 2013, the IRS released guidelines that show the effects of the Court's decision on various tax issues, including the coverage of same-sex spouses under employer-sponsored benefit plans.
Several of the key Employee Benefit Implications of the IRS Ruling are:
- Same-sex couples can receive the same tax break on health coverage that other couples have been receiving.
- Employees will now be able to seek reimbursement from flexible health spending accounts for the medical expenses of same-sex spouses.
- The value of employer-provided health coverage for employee's same-sex spouse no longer is to be included in the employee's gross income for federal tax purposes.
- Contributions made by an employee for the coverage of a same-sex spouse are no longer required to be paid on an after-tax basis.
- A retirement plan must recognize a same-sex spouse for purposes of qualified joint and survivor annuity and spouse death benefits.
In addition, other employer-provided benefits and policies for opposite-sex spouses also must be offered without discrimination to same-sex spouses.
Legal ambiguities remain and will have to be resolved in future court decisions but here are some tips:
Benay works diligently to understand the changing laws for our clients' respective states so that we can effectively inform and advise them.