The Internal Revenue Service recently issued guidance in the wake of the Supreme Court’s decision last June striking down the federal Defense of Marriage Act. As anticipated, the IRS took a state-of-marriage approach — anyone who is legally married in a state or country recognizing same-sex marriage is now treated exactly the same as an opposite-sex spouse for all qualified plan purposes and for tax purposes, including the taxation of medical, dental and vision benefits.
“That’s great news all around,” says Todd Solomon, a partner in the employee benefits practice of McDermott, Will & Emery, and author of Domestic Partner Benefits: An Employer’s Guide. “It’s great news for employees because they’re no longer taxed, and it’s good news for employers that they no longer have to impose the tax and track the imputed income for people who are married.”
