A new set of questions and answers expands on previous IRS guidance announcing that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for all federal tax purposes. The Q&As provide further clarification with respect to the federal tax treatment of certain types of employee benefit arrangements.
Key topics addressed by the Q&As include:
- The application of the annual contribution limit to health savings accounts (HSAs) to same-sex married couples and issues related to excess contributions;
- The permissibility of mid-year election changes to cafeteria plans (also known as section 125 plans) based upon a change in legal marital status and issues related to pre-tax and after-tax contributions for same-sex spouse coverage; and
- The reimbursement of covered expenses from health flexible spending arrangements (FSAs) for a participant's same-sex spouse and the same-sex spouse's dependents.