The IRS issued Revenue Ruling 2013-17, which describes how the IRS will handle same-sex marriages for federal tax purposes in light of the U.S. Supreme Court decision that found a part of the Defense of Marriage Act (DOMA) unconstitutional.
The ruling says:
• The IRS will consider a person in a same-sex marriage as married if they were legally married in any state, territory, or foreign country, even if the couple is currently living in a state that does not recognize same-sex marriage.
• The IRS will not consider a person in a same-sex (or opposite sex) civil union or domestic partnership, even if a “registered” domestic partnership, as “married.”
This Ruling has tremendous estate planning consequences for those living in jurisdictions where same sex marriage is allowed. Specifically, same sex married couples are now entitled to the same unlimited marital deduction previously reserved for opposite sex married couples. This means that one, at their death, can leave their entire estate to their same sex spouse free from estate tax. Keep in mind, however, that this only impacts federal estate tax. Rev. Ruling 2013-17 has no bearing on state inheritance or death tax laws in jurisdictions where such marriages are not recognized.