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 March 22, 2023

Current Benefit Plan and Audit Related News and Updates

Monday, April, 07, 2014 / Published in Employee Benefit Plans, Forms and Procedures, Retirement - 401(k), 403(b)

Treatment of Marriages of Same-Sex Couples for Retirement Plan Purposes

On April 4, 2014, the IRS issued Notice 2014-19, which provides guidance on how qualified retirement plans should treat the marriages of same-sex couples following the Supreme Court’s decision in United States v. Windsor. The Windsor decision invalidated Section 3 of the 1996 Defense of Marriage Act (DOMA) that barred married same-sex couples from being treated as married under federal law.

The notice:

  • gives examples of Code requirements under which the marital status of the participants is relevant to the payment of benefits,
  • provides guidance on how to satisfy those requirements in light of Windsor  and Revenue Ruling 2013-17, and
  • describes when retirement plans must be amended to comply with Windsor, Revenue Ruling 2013-17, and Notice 2014-19

 

Recognition of marriages of same-sex couples for tax purposes

Following the Windsor  decision, the IRS issued Revenue Ruling 2013-17, which holds that married same-sex couples are now treated as married for all federal tax purposes where marriage is a factor, if the couple is lawfully married under the laws of one of the 50 states, the District of Columbia, a U.S. territory or a foreign jurisdiction. Notice 2014-19 gives additional guidance on how qualified retirement plans should treat the marriages of same-sex couples.

Plan amendments required with respect to plan provisions inconsistent with Windsor
  • If its terms are inconsistent with Windsor  or Revenue Ruling 2013-17, a retirement plan must be amended to comply with Windsor  and Revenue Ruling 2013-17. For example, a plan must be amended if it defines “spouse” by reference to section 3 of DOMA, or only as a person of the opposite sex.
  • Not all plans need to be amended in order to be in compliance. An amendment generally is not required if a plan’s terms are not inconsistent with Windsor  or with Revenue Ruling 2013-17.
  • Required amendments must be adopted by the later of December 31, 2014, or the applicable date under the IRS’ general amendment guidance for qualified retirement plans, Revenue Procedure 2007-44.

 

Optional amendments
  • Plan sponsors may also, but are not required to, reflect the outcome of Windsor  for periods prior to the date Windsor  was decided.
  • In such a case, a plan amendment is required.
  • Such optional amendment must be adopted by the later of December 31, 2014, or the applicable date under Revenue Procedure 2007-44.

 

FAQs for more information

See the FAQs on the treatment of same-sex marriages for additional guidance, including:

  • beneficiary designations in profit-sharing plans after Windsor,
  • amendments that reflect the outcome of Windsor  for periods before the decision was issued, and
  • application of the outcome of Windsor  to 403(b) plans.
Additional resources
  • IRS News – For Same-Sex Couples and Certain Domestic Partners
  • Revenue Ruling 2013-17 – treatment of same-sex marriage for federal tax purposes
  • FAQs on treatment of same-sex marriage for retirement plans
Tagged under: 401(k), 403(b), Plan Document

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Torrillo & Associates, LLC specializes in employee benefit plan audits, 401k audits, 403b audits, pension plan audits, and retirement plan audits. We are licensed in 7 states including New York, New Jersey, and Pennsylvania.  With firm mobility, we are also able to practice in an additional 27 states.

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Glen Mills, PA 19342

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