5.12 Same-sex Spousal Benefits

• Library: Corporations and Partnerships in Virginia (Virginia CLE) (2016 Ed.)

5.12 SAME-SEX SPOUSAL BENEFITS

Until recently, employers had difficulty offering employee benefit plans to same-sex spouses of their employees on a tax-favored basis. The Defense of Marriage Act, ⁵²¹ which was enacted on September 21, 1996, provided that for purposes of any federal law or regulation, the word "spouse" referred only to a person of the opposite sex who is a husband or wife and "marriage" meant only a legal union between one man and one woman as husband and wife. As a result of this legislation, the tax benefits under the I.R.C. available for retirement and health and welfare benefits were generally unavailable to same-sex spouses of employees.

As discussed earlier in this chapter, ⁵²² the treatment of same-sex spousal benefits changed dramatically when the Supreme Court issued its decision in United States v. Windsor, ⁵²³ which found that Congress's restriction of the term "spouse" under federal law to members of the opposite sex was unconstitutional. In response to the Supreme Court's Windsor decision, the IRS issued guidance indicating that for federal tax purposes, the terms "spouse," "husband and wife," "husband," and "wife" include an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term "marriage" includes a marriage between individuals of the same sex. The Supreme Court later issued its decision in...