IRS Letter: How to Obtain Tax Refunds for Same-Sex Spousal Health Coverage

The Internal Revenue Service (IRS) issued an outline for obtaining tax refunds for same-sex spousal health coverage. They recognized that a same-sex spouse will be treated as a spouse for federal tax purposes as long as the couple is lawfully married under state law. This means that the value of employer-provided health coverage for an employee's same-sex spouse is excludable from the employee's income for federal tax purposes.

The IRS outlined the following steps for taxpayers:

1. Taxpayer to contact employer and request a corrected Form W-2. Use the W-2 to complete tax return.
2. If no corrected W-2 is issued, taxpayer should file tax return using original Form W-2 and file a Form 2852 reporting correct amount of taxable wages - subtracting the value of excludable spousal health coverage.
3. Describe how the taxpayer determined correct amounts on Form 4852 by updating them to exclude the value of spousal health coverage, as permitted by Rev. Rul. 2013-17 an Notice 2014-1.

For more detailed instructions and more information about the issue, check out this article.