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August 20, 2014

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IRS to recognize all gay marriages, regardless of state

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AP Photo / The Star Tribune, Brian Peterson

On the eve of Minnesota legalizing gay marriage, many gay couples including Emily and Kristina Kritkausky of Minneapolis were starting the party early, July 31, 2013 in Minneapolis.

WASHINGTON — All legally married same-sex couples will be recognized for federal tax purposes, regardless of whether the state where they live recognizes the marriage, the Treasury Department and the Internal Revenue Service said Thursday.

It is the broadest federal rule change to come out of the landmark Supreme Court decision in June that struck down the 1996 Defense of Marriage Act, and a sign of how quickly the government is moving to treat gay couples in the same way that it does straight couples.

The June decision found that same-sex couples were entitled to federal benefits, but left open the question of how Washington would administer them. The Treasury Department answered some of those questions Thursday.

As of the 2013 tax year, same-sex spouses who are legally married will not be able to file federal tax returns as if either were single. Instead, they must file together as “married filing jointly” or individually as “married filing separately.”

Gay and civil rights groups praised the ruling. “Committed and loving gay and lesbian married couples will now be treated equally under our nation’s federal tax laws, regardless of what state they call home,” said Chad Griffin, the president of the Human Rights Campaign. “These families finally have access to crucial tax benefits and protections previously denied to them under the discriminatory Defense of Marriage Act.”

But the Treasury decision could have ramifications for many gay couples’ tax liabilities, said Roberton Williams of the nonpartisan Tax Policy Center in Washington. Couples with similar incomes often pay the “marriage penalty,” with their tax liability as a couple being much higher than it would be if they were single.

The Treasury ruling is one of many that are starting to emerge from all corners of the federal government as Washington changes regulations to conform with the Supreme Court decision.

Separately, the Health and Human Services Department said Thursday that Medicare would extend certain key benefits to same-sex spouses. But federal agencies are not moving in lock step. Instead, they are creating a patchwork of regulations affecting gay and lesbian couples — and may be raising questions about discrimination and fairness in the way that federal benefits are distributed.

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