New IRS Guidance Regarding Same-Sex Spouses: Employer Action Needed

Background

On June 26, 2013, the U.S. Supreme Court, in the landmark case, United States v. Windsor, found the provisions of that portion of the “Defense of Marriage Act” (“DOMA”) which provided that only opposite-sex individuals could be treated as lawfully married and a husband and wife for federal law purposes was unconstitutional (the “Windsor Decision”). Thus, following the Windsor Decision, federal law requires recognition under federal law of otherwise valid same-sex marriages.

The Windsor Decision, however, raised a number of questions concerning (i) how an individual’s marital status will be determined for federal tax purposes (because marital status is generally a state law-based determination), (ii) how and when same-sex spousal status will apply under qualified retirement plans, and (iii) what amendments to such plans will be required and what is the timing for the adoption of such amendments. Previous IRS guidance addressed the question described in clause (i) above. Recently issued IRS guidance responds to other open questions, namely: as of what date will the Windsor Decision apply under qualified retirement plans, when are retirement plan amendments required to comply with the Windsor Decision, and if amendments are required, by what date must such amendments be adopted. This Alert describes briefly the earlier IRS Windsor guidance and provides a detailed discussion of the new IRS Windsor guidance and its impact on qualified retirement plans. For more information concerning the Windsor Decision, please see our prior Alert.

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