By: Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Idaho does not recognize same-sex marriages, but the federal government does. There is a new IRS law, effective September 16, 2013 (Rev. Rule 2013-17, 2013-78). The IRS adopts the “State of Celebration” rule. Same-sex couples legally married in any foreign or domestic jurisdiction are considered married for tax purposes regardless of the state of domicile.
This law, as well as the decision in U.S. v. Windsor, provides married same-sex individuals the same fairness and economic benefits as opposite-sex married couples.
Now there are tax-saving opportunities at the federal level for same-sex couples who were married in a state that recognizes such marriages. Some of these federal tax benefits include:
The right to file joint federal income tax returns
An unlimited marital deduction for gift and estate taxes
The spousal rollover rules apply for retirement accounts
Other federal benefits include:
Social Security spousal and family protections
Rights under the Family Medical Leave Act to care for a spouse
Veteran and military benefits for a spouse
Federal employee health and retirement benefits for a spouse
Cobra coverage for a spouse
The right to petition for a spouse to immigrate
Idaho prohibits same-sex marriages by a constitutional amendment and state law. This is now inconsistent with the federal law. What does that mean to married same-sex couples? For starters, they will pay income taxes to Idaho as single persons and not married persons. As single persons, it is still critical to have an estate plan to protect each person in the marriage. At a minimum, the planning documents should include a power of attorney for health and financial matters, a will or revocable trust agreement, beneficiary designations on retirement accounts and insurance policies, and providing authority regarding disposition of the remains when one spouse dies.