On August 29th, the IRS and Treasury released Revenue Ruling 2013-17, providing guidance for the treatment of same-sex marriages in response to the Supreme Courts decision that Section 3 of the Defense of Marriage Act was unconstitutional. To summarize, for Federal tax purposes:
1. 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 such a marriage between individuals of the same sex.
2. The Service adopts a general rule recognizing a marriage of same-sex individuals that was validly entered into in a state whose laws authorize the marriage of two individuals of the same sex even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages.
3. The terms spouse, husband and wife, husband, and wife do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term marriage does not include such formal relationships.
Revenue Ruling 2013-17 will be applied prospectively as of September 16, 2013. Except for specific instances described in the ruling, affected taxpayers also may rely on this revenue ruling for the purpose of filing original returns, amended returns, adjusted returns, or claims for credit or refund for any overpayment of tax resulting from these holdings, provided the applicable limitations period for filing such claim has not expired.
Specific to IRC §42 and 100% full-time student households, the exception under IRC §42(i)(3)(D)(ii)(II) for students who are married and can file a joint return applies to married same-sex couples as described in #2 above. Further, the exception can be applied retroactively to same-sex couples currently occupying low-income units. For example, if a same-sex married couple is in the process of being evicted because they are both full-time students and were determined to be ineligible for the exception, then the exception is applied retroactively and the couple does not violate the requirement that a unit not be occupied entirely by full-time students.
Please follow this link to view the new Ruling on NAHMAs LIHTC Issues page.