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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104

 

www.wagnerlawgroup.com

 

 

December 19, 2013

 

 State and Federal Law Alert

 

IRS Provides Updated Guidance on Same-Sex Spouses

 

In the wake of the Supreme Court's decision in United States v. Windsor, which held part of the Defense of Marriage Act ("DOMA") to be unconstitutional (see the Alert of 6/27/13), and IRS Notice 2013-61 which said that the IRS will recognize all legally-married, same-sex couples for federal tax purposes, certain questions have arisen with respect to the administration of cafeteria plans and health savings accounts (HSAs). The IRS has now released Notice 2014-1 in response to these questions.

 

One major issue concerning same-sex couples is whether the Windsor decision itself constitutes a "change-in-status" event that would allow for a mid-year election change in a cafeteria plan. The regulations governing the change-in-status rules include "events that change an employee's legal marital status." IRS says that the federal recognition of same-sex marriage under Windsor is such a change in marital status and therefore a mid-year election change would be allowed.

 

The Notice provides that the mid-year election change may be made at any time during the plan year that includes either June 26, 2013 (i.e., the date of the Windsor decision) or December 16, 2013 (i.e., the date of this Notice). Cafeteria plans that do not already provide that "change-in-status" includes changes in legal marital status can be amended to enable these election changes. The Notice permits such amendments to be adopted as late as the end of the first plan year commencing after December 16, 2013 (i.e., by December 31, 2014 for calendar year plans), and to be effective as early as of the beginning of the plan year that includes December 16, 2013 (i.e., January 1, 2013 for calendar year plans).

 

The Notice further permits tax-exempt reimbursements from health care, dependent care, and adoption assistance FSAs for expenses incurred by an employee's same-sex spouse (or the spouse's dependent) on or after the later of: (i) the date of the marriage; or (ii) the beginning of the FSA plan year that includes the Windsor decision. This rule may be retroactively applied if the FSA did not previously reimburse same-sex spouse expenses.

 

The Notice also confirms that certain limitations now apply to same-sex couples as they do for opposite sex married couples. These limitations include the prohibition on couples contributing more than a total of $5,000 to all dependent care FSAs. In addition, the contribution limit for HSAs for married couples ($6,450 in 2013) applies to the total of all contributions made by a same-sex couple in the same manner as it applies to opposite-sex couples.

 

Employers that have additional questions regarding how the Notice affects their plans should consult with qualified employee benefits professionals. Moreover, employers that wish to amend their cafeteria plans to include changes in legal marital status as a "change-in-status" event to allow employees with same-sex spouses to make the retroactive elections provided for by the Notice are advised to engage qualified benefits counsel to do so.

 

The Notice may be accessed at: http://www.irs.gov/pub/irs-drop/n-14-01.pdf.

 

This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.

  

Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.

 

This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.