Does the New Tax Law Affect My Alimony?

Does the New Tax Law Affect My Alimony?

What is the new law?

Effective January 1, 2019, Congress and Trump signed into law the Tax and Jobs Act. The Act, in effect, removes the tax deduction that payors of alimony have enjoyed for decades. Under the new Act, payors of alimony are no longer allowed to deduct alimony payments from their gross income. Furthermore, alimony recipients will receive that money tax-free.

 

What if I am already receiving alimony?

Keep in mind, that if you were awarded alimony through a separation agreement or court order prior to January 1, 2019, you will still be able to enjoy deducting alimony payments from your taxes, and your ex-spouse will still be required to claim the alimony payments on their taxes.

 

How will this affect most Americans?

There is a difference of opinion as to how this new tax law will affect Americans. However, what we do know, is that 1) Uncle Sam will be the ultimate winner, and 2) payors of alimony will offer less in payments during negotiations, as the payor will no longer be able to deduct those payments.

 

The information contained herein is not intended as legal advice. Each person’s case is unique and should be reviewed by a qualified attorney to receive legal advice. To discuss your case, contact Atlantic Coast Law at (910) 769-6884.