All legally married same-sex couples will be treated as married for federal tax purposes whether or not the couple lives in a jurisdiction that recognizes same-sex marriage, the IRS announced on August 29. The ruling, issued two months after the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) in E.S. Windsor (2013-2 ustc ¶50,400, June 26, 2013), affects all federal taxes, including income taxes, estate and gift taxes, payroll taxes associated with employee spousal benefits, and more.
In an effort to simplify and streamline tax administration as much as possible, the IRS, like many other federal agencies, took a “place of celebration” approach rather than using a couple’s “place of domicile” to determine their tax status. Meaning that under these new rules, same-sex marriages that are valid in the state where they were performed will be recognized for all federal tax purposes, even if the couple is domiciled in a state that does not recognize their marriage. These rules apply to income taxes, estate and gift taxes and payroll taxes related to employee benefits.