The United States Supreme Court (“Court”) ruled in Obergefell v. Hodges (“Obergefell”) that same-sex marriage bans are unconstitutional. The decision in Obergefell is a continuation of the Court’s expansion of protections of married same-sex couples from United States v. Windsor. Obergefell will primarily impact private employers with respect to state law including state taxes and related withholding. This ruling requires states to issue marriage licenses to same-sex couples and to recognize same-sex marriages performed in other states; thereby making the “place of celebration” rule under Windsor no longer relevant. While many plans were updated following Windsor, there were governmental plans that existed in states that maintained a same-sex marriage ban that did not adopt a definition of marriage that included same-sex couples. With the ruling in Obergefell, any governmental plan that offers spousal benefits that excludes same-sex couples should be reconsidered, if the term spouse is explicitly defined under the plan. Another consideration for a plan is whether domestic partner benefits are still relevant in light of these decisions. Since same-sex couples now have the same right to marry as opposite-sex couples, a plan that offers domestic partnership benefits may want to review the necessity of such provisions. If you have questions regarding this decision and potential implications for your plan, don’t hesitate to call your Nyhart consultant.
Update: The IRS recently issued Notice 2015-86, providing further guidance on the application of Obergefell on retirement plans. The Notice does not require plan sponsors to amend their plans (because these plans were already required to be amended) to reflect the Windsor decision recognizing same-sex spouses for federal tax purposes. However, the Notice points out that a plan sponsor may decide to amend to make certain optional changes, such as to provide new rights or benefits with respect to participants who have same-sex spouses. Any amendments made are not required, but rather discretionary by the plan sponsor.
2022 Cost of Living Adjustments
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