Benefits and Compensation

Retroactivity for Same-gender Spouses Goes Back to June 2013

IRS on April 4 said rules that do not distinguish between same- and opposite-gender married couples in tax and federal retirement plan provisions will be in effect retroactive to June 26, 2013.

This date is when the U.S. Supreme Court held in U.S. v. Windsor, S. Ct. 2675 (2013) that the lack of recognition of same-gender marriages was unconstitutional. Benefits administrators and affected participants will be able to use that starting point for past claims and coverage and can put in place changes to their plans that have been on hold for months.

Deadline for Plan Amendments

The changes in the announcement must be adopted by retirement plans by Dec. 31, 2014, or an applicable deadline under Section 5.05 of IRS Revenue Procedure 2007-44, whichever is later, IRS said.

IRS provided the long-awaited guidance to retirement plan sponsors and administrators in Notice 2014-19. It outlined several qualified retirement plan rules affecting married participants that would now include same-gender couples following the June 2013 High Court ruling in Windsor.

The recent guidance, which includes nine questions and answers for practitioners, builds on IRS Revenue Ruling 2013-17. That rule set out several applications for federal taxation of same-gender married couples but did not provide a retroactive start date.

Areas potentially affected for retirement plan sponsors and their procedures include:

  • qualified joint and survivor annuities;
  • assignment of funds through qualified domestic relations orders to spouses and former spouses as alternate payees; and
  • minimum distribution rules for surviving spouses.

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