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The tax treatment of same-sex marriages

In a statement, the IRS said on Oct. 21 that it would recognize same-sex marriages in all 50 states for tax purposes. The marriages would be recognized even if they have taken place in states that have not yet legalized such unions. The impetus for the ruling was the June 2015 Supreme Court decision in Obergefell v. Hodges which dealt with a man who had traveled from Ohio to Maryland to marry his partner who was dying from Lou Gehrig's disease.

At the time, Ohio did not recognize same-sex marriages, and the Supreme Court said that such a ban hurt same-sex couples. Before the Supreme Court decision, the IRS could only accept joint returns from couples in states and territories where their marriages were recognized. The newruling means that a couple can consider itself married for tax purposes as long as the marriage is recognized by any state, territory or United States possession.

It would apply to any part of the federal tax code that may be influenced by marriage such as filing status, exemptions and standard deductions available to married couples. There would also be an impact for couples in which one spouse provided insurance for the other through his or her employer. After the IRS ruling, coverage would now be available on a tax-free basis.

Although same-sex marriage is now legal there are still many legal issues that couples may may face. An individual who is in a same-sex relationship may wish to consult with an attorney to determine how recent changes to the law may benefit him or her. For instance, it may now be possible for an individual in a same-sex relationship to inherit property from a spouse or maintain parental rights in the event of a divorce.

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