By: Amanda Wilson
Last month, the IRS announced that same-sex marriages would be recognized as marriages for federal tax purposes. It is important to recognize that this position extends beyond individual income tax consequences and can impact employers as well. A number of income tax and employment tax provisions exclude from gross income and wages certain employee benefits provided to the spouse of an employee. Before last month, the IRS took the position that benefits paid to same-sex spouses of employees did not qualify for these exclusion provisions. The IRS has now changed its position and has stated that this change can be applied retroactively. As a result, employers may find themselves in the situation of having overpaid employment taxes for employees that have a same-sex spouse. The IRS has issued Notice 2013-61 to provide guidance to employers on how to deal with this situation. Employers that have employees with same-sex spouses should be aware of this notice and consider how it may apply to them.