The IRS and Medicare will now recognize same-sex marriages. All of them.

August 29, 2013
Utah's Sen. Jim Dabakis proposed to longtime partner Stephen Justesen in Salt Lake City in June. Utah does not recognize gay marriage. (Chris Detrick/Associated Press/The Salt Lake Tribune)

According to a big new announcement from the IRS and the Treasury Department, if you're a legally married gay couple, the federal government will recognize your marriage — even if you live in a state where your marriage isn't legal.

The statement, released by the Treasury Department Thursday, says that department and the IRS will use a "place of celebration" rule in recognizing same-sex unions (recognition that was illegal before the Supreme Court struck down part of the Defense of Marriage Act last month). That means that the U.S. government recognizes a marriage if the union was legally recognized in the place where it occurred, where it was celebrated. That's true even if the married couple then lives in a state where gay marriage is illegal.

The press release lays this out very clearly: "The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage."

There was some concern among gay rights groups after the high court's ruling that the federal government would instead adhere to a "place of residence" rule in recognizing same-sex unions, which would make it much harder for couples living in states that ban such unions to gain legal recognition. Indeed, the IRS usually complies with a place of residence rule but went against precedent in this case.

That means that if you live, say, in Fairfax County in Virginia, where same-sex marriage is illegal, you can simply marry your same-sex partner in nearby Washington, D.C., or Maryland, where it's legal, and the federal government will treat you as married. Or, if you live in Washington, get married, and then move to Virginia, you won't lose federal recognition of your marriage.

What's more, the rule is retroactive. As the press release puts it: "Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011, and 2012."

Given that same-sex couples are likelier to have similar incomes than opposite-sex couples (which is why the Congressional Budget Office scored legal same-sex marriage as increasing revenue and reducing the deficit), the number of people eligible for refunds in those years will be considerably smaller than the total married population. And the tax bill for many couples will grow going forward.

This is a big first step to general federal recognition of same-sex marriages. And the government took a second step, too. The Department of Health and Human Services ruled Thursday that legally wedded same-sex couples, wherever they live, are eligible for certain Medicare benefits reserved for married couples. In its memo, HHS "specifically clarifies that this guarantee of coverage applies equally to couples who are in a legally recognized same-sex marriage, regardless of where they live."

"Today, Medicare is ensuring that all beneficiaries will have equal access to coverage in a nursing home where their spouse lives, regardless of their sexual orientation," Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner said in a statement. "Prior to this, a beneficiary in a same-sex marriage enrolled in a Medicare Advantage plan did not have equal access to such coverage and, as a result, could have faced time away from his or her spouse or higher costs because of the way that marriage was defined for this purpose."

It's still not all federal government roses for these couples. Social Security uses a place of residence rule, and has issued instructions to personnel to deny claims for spousal benefits from  same-sex couples living in states where such marriages are not recognized. But the overall trend is toward a federal government that offers benefits to as expansive a set of same-sex married couples as possible.

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