Divorce

Divorce

Monday, July 9, 2018

New Alimony Law Affecting Payors in 2019--Are You Ready?

The Tax Cuts and Jobs Act (TCJA) eliminates the alimony DEDUCTION for the payor spouse as applied to divorce orders or modification orders executed on or after 1/1/19 if the modification states that the TCJA applies. POTENTIAL payors of alimony may want to obtain a divorce agreement or order before the end of the year.


Conversely, recipients of alimony may want to hold off until 2019 so that the alimony payments are non taxable.   https://www.law.com/newyorklawjournal/2018/03/19/marital-dissolution-planning-after-the-tax-cuts-and-jobs-act/?slreturn=20180611105622

Without the alimony deduction as to the payor's taxable income,  the payor would have a tax increase, therefore obtaining the order prior to the cut off will likely end up saving the payor some funds in many cases. It is suggested that contacting your tax consultant is a wise idea.