The Internal Revenue Service (IRS) has announced that it will recognise same-sex marriages recognised by any state, possession or territory of the United States for tax purposes.
Under the new regulations, the terms "husband" and "wife" will now also include same-sex spouses in compliance with the US Supreme Court ruling in the Obergefell v. Hodges case last June that legalized gay marriage in the US.
"The proposed regulations confirm that terms in the federal tax code relating to marriage should be interpreted to include same-sex spouses as well as opposite-sex spouses, ensuring that all are treated equally under the law," said Treasury Secretary Jack Lew.
NBC News reported that before the US Supreme Court ruling, 13 states had laws that barred same-sex marriage. The IRS already accepted returns from same-sex couples that identify themselves as married but only from 37 states and other US territories that had legalised unions.
The proposed IRS regulations will apply 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.
However, the IRS will not treat registered domestic partnerships, civil unions, or similar relationships not denominated as marriage under state law as marriage for federal tax purposes.
The IRS said the rule protects individuals who have specifically chosen to enter into a state law registered domestic partnership, civil union, or similar relationship rather than a marriage, because they can retain their status as single for federal tax purposes.
Since the 2013 revenue ruling, legally married couples generally must file their federal income tax returns using either the "married filing jointly" or "married filing separately" filing status.
According to NBC News, the biggest impact would be on couples under which one spouse's job provides employer-provided health insurance. The other spouse's coverage will now be tax-free in the US, the same as those for married couples and dependent children.
