While same-sex couples celebrate the Supreme Court’s overturning of the Defense of Marriage Act, American companies are wondering how to navigate the human resources issues and tax and Social Security filings that may be affected. Law firms are fielding questions from companies almost daily about what the ruling means for them and their employees.
According to attorney Chris Karachale at Hanson Bridgett in San Francisco, for now, it’s a waiting game.
“The Windsor decision raises more questions than it answers,” he said. “Unless we have good guidance from the IRS, it’s going to be very difficult for employers and employees to figure out what their tax status is and how they should file their tax returns, if they’re individuals, or treat their employees.”
Due to United States v. Windsor, the federal government has to acknowledge same-sex marriage for couples who live or were married in states that recognize their union. One of the biggest issues is whether the government will recognize marriages based on where they were performed or on where the couple lives. Thirteen states and the District of Columbia now allow same-sex marriage or civil unions.
One of the most anticipated decisions is how the IRS will respond to the ruling, since same-sex couples might increase their refund by filing jointly. In addition to future returns, there is the question as to whether the IRS will allow couples to file amended returns from past years.
Karachale said he expects the agency to announce some decisions in the fall, and all companies can do now is help their employees identify in advance specific questions they may have.
“Given that we don’t know what is going to happen until the IRS issues guidance, I think employers need to review all their employees and figure out what employee pool is potentially effected by the decision.”
There are some 1,100 federal agencies that will have to decide on their official interpretation of the ruling. And then there are 35 states with laws or constitutional amendments prohibiting same-sex marriage, where couples will be even more reliant on those federal agencies. Karachale said he expects there to be some uniformity among them all.