In recent years, two landmark court cases have dramatically altered the treatment of same-sex marriages in our country.
In 2013, the Supreme Court decided United States v. Windsor, concluding that Section 3 of the Defense of Marriage Act (DOMA), which generally prohibited the federal government from recognizing the marriages of same-sex couples, was unconstitutional. This meant that for the first time, the IRS was required to recognize as “married” same-sex couples who were legally married under state law. This opened up to same-sex couples a host of never-before available opportunities under the tax law, including the ability to file jointly and to be respected as a spouse for purposes of transferring property and receiving benefits under a qualified plan.
While a breakthrough in many ways for same-sex couples seeking equal tax treatment under the Code, the decision in Windsor still left many unanswered questions. For example, how would the IRS treat taxpayers who were legally married in one state but then moved to another state that did not recognize their union?
Two years later, the Supreme Court put an end to any such concern when it decided in Obergefell v. Hodges that all states must legalize same-sex marriage. This opened to same-sex couples, for the first time in our country’s history, the opportunity to marry wherever they chose. From a tax perspective, the holding in Obergefell also provided much needed certainty for married same-sex couples; assuring that they be treated as “married” for purposes of the tax law wherever they married or resided.