How Revenue Ruling 2013-17 Defines Marriage for Taxes

An Internal Revenue Service (IRS) Revenue Ruling is an official interpretation of the tax code. While early rulings addressed the tax treatment of same-sex marriages, the legal landscape was reshaped by the Supreme Court. The Court’s 2015 decision in Obergefell v. Hodges made same-sex marriage a constitutional right nationwide. Following this, the IRS affirmed that for federal tax purposes, it would recognize any marriage valid in the state or country where it was performed. This current standard supersedes earlier guidance, including Revenue Ruling 2013-17.

The Governing Principle of Recognition

For federal tax purposes, a couple is considered married if their union is legally recognized as a marriage in the U.S. state, territory, or foreign country where it was performed. This is known as the “state of celebration” rule, which provides a uniform standard nationwide.

Following the Obergefell v. Hodges decision, the distinction between where a couple was married and where they live is no longer a significant issue for marriages within the United States. The “state of celebration” rule is now primarily relevant for recognizing the validity of marriages performed in foreign jurisdictions.

These rules apply only to unions legally defined as “marriage.” The IRS guidance does not extend to registered domestic partnerships, civil unions, or other formal relationships not defined as marriage under the laws of the jurisdiction where they were formed. Only a legal marriage grants access to the federal tax provisions available to spouses.

Impact on Federal Tax Areas

The legal recognition of marriage has widespread consequences across federal taxation, altering how couples calculate tax liabilities, plan estates, and manage employment benefits. These changes require careful consideration for spouses to ensure compliance and use available tax provisions.

Income Tax

The most direct impact is on filing annual income tax returns. Recognized couples must file using either the “Married Filing Jointly” or “Married Filing Separately” status. This change affects their tax brackets and standard deduction amounts.

Filing jointly often results in a lower tax liability for couples with disparate incomes. Marital status is also a gateway for numerous tax deductions and credits, including for education and Individual Retirement Arrangement (IRA) contributions.

Gift and Estate Tax

The recognition of marriage provides spouses access to estate planning tools, including the unlimited marital deduction. This provision allows an individual to transfer an unlimited amount of assets to their spouse at any time, including at death, free from federal gift or estate tax.

Spouses can structure their estates to delay the payment of any estate tax until the death of the second spouse. It also enables “portability,” which allows a surviving spouse to use any of the deceased spouse’s unused estate and gift tax exclusion amount.

Retirement Plans and Employee Benefits

The recognition of marriage extends into the regulation of employee benefits and retirement accounts. For qualified retirement plans like 401(k)s, a spouse is recognized for all purposes under the Employee Retirement Income Security Act (ERISA) and automatically gains rights as a primary beneficiary.

If a plan participant wishes to name someone other than their spouse as the primary beneficiary, they must first obtain written, notarized consent from their spouse. Spouses also gain rollover rights, allowing them to roll over inherited retirement assets into their own retirement account. Additionally, the value of employer-provided health insurance for a spouse can be excluded from the employee’s gross income.

Retroactive Application and Amended Returns

A feature of the initial IRS guidance issued after the Windsor decision was its retroactive effect, which allowed eligible taxpayers to apply the new rules to prior tax years. This created an opportunity for legally married same-sex couples to revisit previously filed tax returns for any tax year still open under the statute of limitations.

The mechanism for this process is Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers could use this form to change their filing status from “Single” or “Head of Household” to “Married Filing Jointly” or “Married Filing Separately.” The statute of limitations for claiming a refund is generally three years from the date the original return was filed or two years from the date the tax was paid, whichever is later.

For many couples, amending their returns to file jointly resulted in a lower tax liability and a corresponding refund, particularly where one spouse had a significantly higher income. However, taxpayers needed to evaluate if amending was beneficial, as those with similar high incomes could face a higher tax liability, often called a “marriage penalty.”