IRS Provides Guidance on Tax Refunds for Same-Sex Couples

The Internal Revenue Service has released guidance on issuing tax refunds to same-sex married couples in the wake of the Supreme Court’s decision striking down the Defense of Marriage Act.

Notice 2013-61 provides guidance to employers and employees to make claims for refund or adjustments of overpayments of Federal Insurance Contributions Act, or FICA, taxes and federal income tax withholding employment taxes resulting from the Supreme Court’s decision in United States v. Windsor, and the holdings of IRS Revenue Ruling 2013-17 and Internal Revenue Bulletin 2013-38 (see Treasury and IRS Recognize Same-Sex Marriages for Tax Purposes).

The notice also provides special administrative procedures that can be used by employers to claim refunds or make adjustments of overpayments of employment taxes that have been paid with respect to same-sex spouse benefits for 2013, along with a special administrative procedure that can be used for overpayments of FICA taxes for years before 2013.

The special administrative procedures provided in the notice are optional, the IRS noted.

Labor Department Guidance
Last week, the Department of Labor issued new guidance interpreting the Supreme Court's decision in United States v. Windsor. In a technical release, the department's Employee Benefits Security Administration provided guidance to plans, plan sponsors, fiduciaries, participants and beneficiaries on the decision's impact on the Employee Retirement Income Security Act of 1974.

The release stated that, in general, the terms "spouse" and "marriage" in Title I of ERISA and in related department regulations should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of where they currently live.

On June 26, 2013, the Windsor decision struck down the provisions of the Defense of Marriage Act that denied federal benefits to legally married, same-sex couples.

"This decision represents a historic step toward equality for all American families, and I have directed the department's agency heads to ensure that they are implementing the decision in a way that provides maximum protection for workers and their families," said Secretary of Labor Thomas E. Perez in a statement. "The department plans to issue additional guidance in the coming months as we continue to consult with the Department of Justice and other federal agencies to implement the decision."

"By providing greater clarity on how the Supreme Court's decision affects one of the laws we enforce, we are contributing to greater equality and greater protection for America's working families," said Assistant Secretary for Employee Benefits Security Phyllis C. Borzi.