Legal View: Defense of Marriage Act ruling has legal implications

Heather Kmetz and Cliff Davidson,
The Daily Record Newswire

On June 26, the U.S. Supreme Court affirmed lower federal court decisions in United States v. Windsor, striking down section 3 of the Defense of Marriage Act (DOMA) as unconstitutional on equal protection grounds. Thus, legally-sanctioned same-sex couples must be recognized under federal law, and approximately 1,100 individual federal provisions affecting spouses are implicated.

On Aug. 29, the U.S. Department of the Treasury and the Internal Revenue Service ruled (Revenue Ruling 2013-17) that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for all federal tax purposes. The ruling applies regardless whether couples currently live in a jurisdiction that recognizes marriage of same-sex couples.

In practical terms, the court decision and federal agency guidance mean that all legally married couples will have the same rights (and obligations) with respect to income, gift and estate tax and in other federally regulated areas of law — including campaign finance, citizenship and immigration, employment and retirement, health care, securities, Social Security and Medicare benefits.

Section 3 of DOMA prohibited federal recognition of valid state marriage between persons of the same sex. Section 3 defined “marriage” for purposes of all federal statutes, regulations, rulings, and interpretations as “a legal union between one man and one woman as husband and wife,” and “spouse” as “a person of the opposite sex who is a husband or a wife.”

The Supreme Court did not hold that the states must permit same-sex couples to marry. Rather, the decision means that if a state permits same-sex couple to marry, then the federal government must recognize same-sex marriages on the same terms as opposite-sex marriages.

Justice Anthony Kennedy thus wrote for the majority that while the federal government has “no legitimate purpose” in refusing to acknowledge marriages that states have made legal, “this opinion and its holding are confined to those lawful marriages.”

The DOMA decision also was silent as to federal recognition of individuals joined under same-sex civil unions (in Colorado, Hawaii, Illinois and New Jersey) and domestic partnerships (in Oregon, Nevada and Wisconsin), and did not address Section 2 of DOMA, which specifies that states need not recognize out-of-state marriages between spouses of the same sex.

Despite the majority opinion’s attempt to confine its opinion, many observers believe it is likely that the Windsor decision will be the basis for requiring marriage equality nationwide. The decision was based primarily on equal protection principles, found in the Fifth and 14th Amendments of the U.S. Constitution. Those principles apply to both the federal government and to the states. Thus, Justice Antonin Scalia wrote, “It takes real cheek for today’s majority to assure us, as it is going out the door, that a constitutional requirement to give formal recognition to same-sex marriage is not at issue here.”

While most states either prohibit marriages between individuals of the same sex or are silent on the issue, 13 states, the District of Columbia, and various foreign jurisdictions allow same-sex couples to marry. States include: California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington.

The Windsor decision and subsequent Treasury guidance does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.

Revenue Ruling 2013-17 makes clear that Windsor applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit.

“Today’s ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide. It provides access to benefits, responsibilities and protections under federal tax law that all Americans deserve,” Treasury Secretary Jacob J. Lew said. “This ruling also assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change.”

Revenue Ruling 2013-17 also made clear that the Windsor decision is retroactively effective (prior to the court’s publication of its decision), at least for some purposes. Same-sex couples who were legally married in prior years may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.

Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income, and file an original return, amended return, adjusted return, or claim for credit or refund of an overpayment of tax.

The Treasury intends to issue further guidance on the retroactive application of the Supreme Court’s opinion in Windsor to other employee benefits and employee benefit plans and arrangements, taking into account the potential consequences of retroactive application to all taxpayers involved, including the plan sponsor, the plan or arrangement, employers, affected employees and beneficiaries.

Individuals should seek counsel to ensure that they are taking maximum benefit of the Supreme Court’s decision and the authority under Revenue Ruling 2013-17 – particularly in the areas of gift and estate tax planning, benefits and retirement planning, and immigration. Employers should seek counsel to ensure they are in full compliance with the various tax and benefits implications of the decision.


Heather Kmetz is a partner at Sussman Shank LLP and chairwoman of the firm’s tax group. Contact her at 503-227-1111 or
Cliff Davidson is an attorney at Sussman Shank LLP and a member of the firm’s litigation group. Contact him at 503-227-1111 or