The Treasury and Internal Revenue Service (IRS) have issued a further notice in response to the Supreme Court ordered that same-sex couples should be given all of the federal tax benefits that are extended to heterosexual married couples. On June 26, 2013, The Supreme Court declared unconstitutional Section 3 of the 1996 Defense of Marriage Act, which had restrained the Federal Government from recognizing any marriage except that between a man and a woman.
Treasury and the IRS also issued a ruling on August this year that same sex couples will be regarded as married for 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 a retirement account and claiming the earned income tax credit or child tax credit. In the subsequent, it has now been determined that the tax rules for cafeteria plans, which allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits, also apply to individuals with same-sex spouses.
The new notice permits changes to elections for same-sex married couples during the plan year that includes the date of the Windsor decision. Sponsors of cafeteria plans can now permit employees to choose to enroll same-sex spouses in health coverage in the middle of a plan year, even though mid-year enrollments would otherwise be prohibited.
