In a historic ruling on June 26, 2013, the Supreme Court struck down Section 3 of the federal Defense of Marriage Act (DOMA) which defined marriage as a legal union between one man and one woman as husband and wife for the purpose of all federal laws. DOMA prohibited married same-sex couples from taking advantage of over one thousand federal rights, responsibilities and benefits including laws regulating Social Security benefits, health insurance, medical leave, veterans and military benefits, and federal income tax.

The case, Windsor v. U.S., involved an estate tax dispute between a surviving spouse of a same-sex marriage and the Internal Revenue Service. The Plaintiff, Edie Windsor, of New York, sued the federal government after the Internal Revenue Service (IRS) denied her refund request for the $363,000 in federal estate taxes she paid after her spouse died. DOMA barred Edie Windsor from claiming the federal estate marital deduction.

The Supreme Court found that the definition of marriage under DOMA violates the equal protection clause of the Fifth Amendment of the U.S. Constitution as applied to persons of the same sex who are legally married under the laws of their state. Writing for the 5-4 majority, Justice Anthony Kennedy said that “DOMA rejects the long established precepts that the incidents, benefits and obligations of marriage are uniform for all married couples within each State, though they may vary, subject to constitutional guarantees, from one State to the next.” He went on to say that “by creating two contradictory marriage regimes within the same State, DOMA forces same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the State had found it proper to acknowledge and protect.”

The Supreme Court did not extend same-sex marriage nationwide. It also declined to say whether same-sex couples had a constitutional right to marriage that would override state law. But the decision ensures that federal benefits and protections will be extended equally to married same-sex couples in Massachusetts, and the other twelve states (California, Connecticut, Delaware, Iowa, Maine, Maryland, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington) plus the District of Columbia where same-sex marriage is legal.

When the decision was issued, President Obama directed all federal agencies, including the IRS, to revise their regulations as soon as possible. To date, no changes have been made and it is unclear how quickly the IRS and other federal agencies will react to the decision. However, there is no question that the implications of the decision will be far reaching for same–sex couples who are married in their home state or in other states that recognize same-sex marriage. The decision impacts the hundreds of provisions in the Tax Code involving major life events such as marriage, employment, retirement and death, including filing joint tax returns, estate tax and gifting, employee and health care benefits, adoption benefits, the child tax credit, education tax credits and retirement plans. Social Security survivor benefits, as well as military and veterans benefits will be available, as will COBRA and spousal benefits in Medicare. The decision also impacts immigration laws, permitting same-sex spouses who are citizens to sponsor a visa for a non-citizen spouse.

In addition, estate planning for same-sex couples in Massachusetts opens up new opportunities that were never available until now. For example, same-sex married couples in Massachusetts will be able to file a joint federal tax return, whereas, prior to the decision, they could only file a joint return for Massachusetts and then file separately as a single person for their federal tax returns. This, coupled with an unlimited marital deduction that applies to state and federal taxes, offers same-sex couples potentially significant tax savings.