The IRS issued Notice 2014-1 to address issues relating to cafeteria plans, flexible spending account plans and health savings accounts for employees with same-sex spouses. The guidance incorporates the Supreme Court’s decision in United States v. Windsor, which ruled the Defense of Marriage Act unconstitutional, thereby recognizing same-sex marriage.
The Windsor decision created uncertainty with respect to the tax treatment of employee benefits provided to same-sex spouses. The IRS’ new notice recognizes the retroactive effect of marital status and provides:
Employers should review the tax implications of their benefit plans to make sure that employees with same-sex spouses are now receiving proper tax treatment.