Is a same-sex couple that is considered lawfully married for federal tax purposes considered married for Wisconsin income tax purposes?
Yes. On October 6, 2014, the U.S. Supreme Court denied Wisconsin's petition for certiorari in
Walker v. Wolf regarding the ban on same-sex marriage. As a result, same-sex marriage is now legal and recognized in Wisconsin. The definition of a "married person" for Wisconsin income tax purposes means a person determined to be married under sec.
7703(a), IRC.
Will the Department recognize the validity of same-sex marriage licenses issued between June 6 and 13, 2014, before higher courts ruled in the
Walker v. Wolf case?
Yes. To the extent that any couple, regardless of sex, received a marriage license and followed the requirements of ch. 765, Wis. Stats., the department will treat those couples as married under Wisconsin law, even if they received their license between June 6 and 13, 2014.
How should a lawfully married same-sex couple file their Wisconsin income tax returns?
A lawfully married same-sex couple must file their Wisconsin individual income tax returns as married filing jointly, married filing separately, or, if qualified, as head of household.
Note: A couple is considered married for the whole year if they were lawfully married as of December 31. If a spouse dies during the year, the couple may file a joint return for the year unless the surviving spouse remarries during the year. Lawfully married means a valid marriage in a state that recognizes same-sex marriage.
I have a health savings account that pays qualified medical expenses of myself and my same-sex spouse. What is the Wisconsin treatment of contributions to the health savings account?
The definition of a health savings account (HSA) requires that it be set up exclusively for the purpose of paying qualified medical expenses for the account holder, their spouse, and any dependents. Because Wisconsin recognizes a same-sex marriage, contributions to an HSA are deductible for Wisconsin tax purposes if the HSA provides benefits to a same-sex spouse. Employer contributions to an HSA that provides benefits to a same-sex spouse are excluded as taxable wages on the employee's Form W-2 for Wisconsin.
My same-sex spouse and I each made contributions to a traditional IRA subject to the spousal IRA limitations. Are the amounts contributed to each IRA deductible for Wisconsin?
Because Wisconsin recognizes a same-sex marriage, the federal spousal IRA provisions apply for Wisconsin.
What is the tax treatment of a traditional IRA that I inherited from my same-sex spouse?
For federal tax purposes, special rules apply to an inherited IRA. If the beneficiary of a traditional IRA is the decedent's surviving spouse, who properly rolls over the distribution into another traditional IRA, the distribution (rollover) is not taxable. A surviving spouse can also roll over tax-free the taxable part of the distribution from other qualified plans including section 401(k) plans, section 403(b) plans, and section 457 plans.
Since Wisconsin recognizes a same-sex marriage, the special rules that apply to a surviving spouse for federal tax purposes also apply for Wisconsin.
Can I add my same-sex spouse to my employer-provided health insurance without having to impute taxable income?
Yes. Wisconsin follows the Internal Revenue Code and excludes from income contributions to an accident or health plan for injuries or sickness incurred by the employee, their spouse, or dependents. Since Wisconsin recognizes a same-sex marriage, employers may exclude from employee income the value of an employer-provided health insurance plan for a same-sex spouse.
How does the U.S. Supreme Court decision relating to same-sex marriage affect employers?
Prior to the U.S. Supreme Court denial of Wisconsin's petition for certiorari in
Walker v. Wolf on October 6, 2014, for Wisconsin tax purposes an employer that provided health insurance benefits that covered a same-sex spouse of the employee was required to impute income taxable to the employee equal to the value of the employer-provided health insurance. The imputed income and related withholding would be reported on the employee's 2014 Form W-2.
This treatment changed for an employee who is lawfully married to a person of the same sex.
For an employee who was lawfully married to a person of the same sex on January 1, 2014, the employer should not include any imputed income on the 2014 Form W-2.
For an employee who first became lawfully married to a person of the same sex after January 1, 2014, the employer should not include any imputed income on the Form W-2 from the date of marriage through December 31. Assuming the health insurance covered the same-sex person as a domestic partner prior to marriage, imputed income must be reported from January 1 until the date of marriage, but no imputed income would be reported on the Form W-2 for the period after marriage until the end of the year.
This document provides statements or interpretations of the following laws and regulations enacted as of November 15, 2023: ch. 765,
Wis. Stats., secs. 71.01, 71.03 and 71.75, Wis. Stats., sec. Tax 2.12,
Wis. Adm. Code, secs. 2, 125, 223, and 7703,
IRC, 26 CFR § 1.408-8, and
Walker v. Wolf.
Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.
Contact Us
MS 5-77
Wisconsin Department of Revenue
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2486
Fax: (608) 267-1030
Email:
DORIncome@wisconsin.gov