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Deadline to Amend Retirement Plans to Reflect Windsor Decision Approaching Fast

The deadline to amend retirement plans to reflect the Windsor decision is approaching fast. As of September 16, 2013, the IRS requires qualified retirement plans to treat a same-sex spouse as a spouse for plan purposes. In April of this year, the IRS specified that amendments to qualified plans are required by the end of 2014 if the plan’s definition of marriage is inconsistent with the Windsor decision.

DOMA Section 3 was enacted in 1996 and defined marriage between one man and one woman as husband and wife. In 2013, the Supreme Court decided, in U.S. v. Windsor, that Section 3 of DOMA was unconstitutional because it deprived same-sex spouses of equal protection. Revenue Ruling 2013-17 provided that taxpayers may rely on Windsor retroactively “with respect to any employee benefit plan or arrangement or any benefit provided thereunder only for purposes of filing original returns, amended returns, adjusted returns, or claims for credit or refund of an overpayment of tax concerning employment tax and income tax with respect to employer-provided health coverage benefits or fringe benefits that were provided by the employer and are excludable from income” under Code Sec. 106, Code Sec. 117(d), Code Sec. 119, Code Sec. 129 , or Code Sec. 132 based on an individual’s marital status.

In an IRS Notice, the IRS provided further guidance on the effect of Windsor on qualified retirement plans and plan amendments. The Notice stated that a plan must be amended in certain situations, including if its terms with respect to the requirements of Code Sec. 401(a) define a marital relationship by reference to Section 3 of DOMA or are otherwise inconsistent with the outcome of Windsor. The deadline for adopting such amendments is generally December 31, 2014. Because the deadline to file amended returns is only two weeks away, retirement plans that have not already done so should change the terms of their plans so they are consistent with Windsor. Also, plans that have already amended their terms should make sure that they comply with any subsequently issued guidance.