Important Changes to Tax Code Regarding Alimony
Alimony is a hotly contested issue in resolving a divorce. The court considers many factors in determining whether alimony is appropriate in any given case. An important consideration for both parties is the tax implications of making or receiving alimony payments. Parties ordered to pay alimony or those who agree to pay alimony have been permitted in the past to take those payments as deductions on their income tax returns. These deductions have made negotiating alimony more palatable for those making the payments as the party receiving the payment was also required to report it as income. This will all change as of December 31, 2018. The new tax code does not allow alimony payments to be deducted from a taxpayer’s income and also does not require the payee to include them as income. These and other important changes in Family Law can have a serious effect on the outcome of a case so it is important to have representation from a firm with the most up-to-date understanding of the current law.
Article by Jason Lepley, Family Law Attorney,
Lepley, Engelman, Yaw & Wilk