2014 Tax Season to Start Later Following Government Closure; IRS Sees Heavy Demand As Operations Resume

2014 Tax Season to Start Later Following Government Closure; IRS Sees Heavy Demand As Operations Resume

IRS Recognizes Same Sex Marriages

Treasury and IRS Announce That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes; Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples

Note: On Sept. 23, 2013 IRS issued Notice 2013-61 providing guidance for employers and employees to claim refunds or adjust overpayments of FICA taxes and employment taxes with respect to certain benefits and remunerations provided to same-sex spouses.

IR-2013-72, Aug. 29, 2013

WASHINGTON — 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.

The ruling implements federal tax aspects of the June 26 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.

Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.

Legally-married same-sex couples generally must file their 2013 federal income tax return using either the married filing jointly or married filing separately filing status.Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.

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. Some taxpayers may have special circumstances, such as signing an agreement with the IRS to keep the statute of limitations open, that permit them to file refund claims for tax years 2009 and earlier.Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.

How to File a Claim for Refund

Taxpayers who wish to file a refund claim for income taxes should use Form 1040X, Amended U.S. Individual Income Tax Return.

Taxpayers who wish to file a refund claim for gift or estate taxes should file Form 843, Claim for Refund and Request for Abatement. For information on filing an amended return, see Tax Topic 308, Amended Returns, available on IRS.gov, or the Instructions to Forms 1040X and 843. Information on where to file your amended returns is available in the instructions to the form.

Future Guidance

Treasury and the IRS intend to issue streamlined procedures for employers who wish to file refund claims for payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses. Treasury and IRS also intend to issue further guidance on cafeteria plans and on how qualified retirement plans and other tax-favored arrangements should treat same-sex spouses for periods before the effective date of this Revenue Ruling.Other agencies may provide guidance on other federal programs that they administer that are affected by the Code.

Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.Treasury and the IRS will begin applying the terms of Revenue Ruling 2013-17 on Sept. 16, 2013, but taxpayers who wish to rely on the terms of the Revenue Ruling for earlier periods may choose to do so, as long as the statute of limitations for the earlier period has not expired.

.

Resources

IRS website: IRS.gov/aca

HHS website: http://Healthcare.gov

SBA website: http://SBA.gov/healthcare

DOL website: http://DOL.gov/ebsa/healthreform

Business USA Website: http://Business.USA.gov/healthcare

Looking ahead to 2014

Premium Tax Credit: To claim the premium tax credit, you must get insurance through the Marketplace. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return filed in 2015. Learn More.

Individual Shared Responsibility Payment: Starting January 2014, you and your family must either have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax returnin 2015. Most people already have qualifying health care coverage and will not need to do anything more than maintain that coverage throughout2014. Learn More.

Change in Circumstances: If you are receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report changes such as income or family size to your marketplace. Reporting changes will help to make sure you are getting the proper amount of assistance.

CA and Undocumented Workers

Internet rumors would have you believe that the new health care law will force employers to provide health insurance benefits to undocumented workers. Section 1411 of the Affordable Care Act (ACA) specifically excludes people who are in our country illegally from receiving any benefits.

Sec. 1411. Procedures for determining eligibility for exchange participation, premium tax credits and reduced cost-sharing, and individual responsibility exemptions.

(1) IN GENERAL. An applicant for enrollment in a qualified health plan offered through an Exchange in the individual market shall provide:

(A) The name, address, and date of birth of each individual who is to be covered by the plan (in this subsection referred to as an ''enrollee''); and

(B) The information required by any of the following paragraphs that is applicable to an enrollee.

(2) CITIZENSHIP OR IMMIGRATION STATUS. The following information shall be provided with respect to every enrollee:

(A) In the case of an enrollee whose eligibility is based on an attestation of citizenship of the enrollee, the enrollee's social security number.

(B) In the case of an individual whose eligibility is based on an attestation of the enrollee's immigration status, the enrollee's social security number (if applicable) and such identifying information with respect to the enrollee's immigration status as the Secretary, after consultation with the Secretary of Homeland Security, determines appropriate.

Nothing in the ACA rules allow federal payments or credits for individuals who aren't lawfully present in the U.S. [Sec. 1412(d), PL 111-148, 3/23/2010. Joint Committee Staff, Tech Explanation of the Revenue Provisions of the Reconciliation Act of 2010, as Amended, in Combination With the Patient Protection and Affordable Care Act (JCX-18-10), 3/21/2010, p. 12, 22]. The ACA specifically states in §1411 that before an individual is eligible to benefit from the new system, they have to be able to prove their legal citizenship or immigration status.

Affordable Care Act Tax Provisions for Individuals and Families

The Affordable Care Act, or health care law, contains new health insurance coverage and financial assistance options for individuals and families. The IRS will administer the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and financial assistance.

Do I need to do anything right now to get ready for the changes coming in 2014?

• The premium tax credit can help make the cost of purchasing health insurance coverage through the Marketplace more affordable for individuals and families with low to moderate incomes. Learn more.
• You may have received a letter from your employer providing information about the new Marketplace, and any health insurance coverage your employer may offer. For more information about coverage options through the Marketplace, visit HealthCare.gov. If you have questions about  the coverage offered by your employer, please contact your employer.

Considerations for 2013

• Open Enrollment for the Health Insurance Marketplace: The open enrollment period to purchase health care coverage through the new Health Insurance Marketplace began Oct. 1, 2013. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
  
• Filing Requirement: If you do not have a tax filing requirement, you do not need to file a 2013 federal tax return to establish future eligibility or qualify for future financial assistance, including advance payments of the premium tax credit to purchase health insurance coverage through a Health Insurance Marketplace. Learn more at HealthCare.gov.
  
• W-2 Reporting of Employer Coverage: Certain employers are required to report the value of the health insurance coverage they provide. The value of health care coverage as reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable.
  
• Itemized Medical Expenses: You can deduct your unreimbursed medical and dental expenses that exceed 10 percent of your adjusted gross income on your 2013 tax return. The 7.5 percent threshold will remain for those 65 and older for tax years 2013 through 2016.
  
• Other ACA Tax Provisions: Additional Medicare Tax, Premium Rebate for Medical Loss Ratio, Health Flexible Spending Arrangements, Health Saving Accounts, and Net Investment Income Tax.
  

Looking ahead to 2014

• Premium Tax Credit: To claim the premium tax credit, you must get insurance through the Marketplace. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return filed in 2015. Learn More.
  
• Individual Shared Responsibility Payment: Starting January 2014, you and your family must either have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. Most people already have qualifying health care coverage and will not need to do anything more than maintain that coverage throughout 2014. Learn More.
  
• Change in Circumstances: If you are receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report changes such as income or family size to your marketplace. Reporting changes will help to make sure you are getting the proper amount of assistance.

Page Last Reviewed or Updated: 21-Oct-2013