Alimony Under New Tax Cuts and Jobs Act (TCJA)
By Patricia Jones CPA/ABV/CFF CFE
There is a new tax law regarding alimony effective December 31, 2018. For couples presently in a divorce proceeding they should plan to meet with their tax advisor to discuss the new divorce tax laws.
Under a divorce agreement, a spouse may be legally obligated to make alimony payments to the other party. Before the new Tax Cuts and Jobs Act(TCJA) payments that met the requirements could be deducted by the payer on his/her tax return for federal income tax and the recipient spouse was required to include the payments on his/her tax return as taxable income. As long as the divorce is finalized on or before December 31, 2018 alimony is deductible in future years if the requirements are met listed below:
The old tax law is in effect until December 31, 2018. For payments under a divorce or separation agreement executed after that date the new law eliminates the deduction for alimony payments and the recipient no longer has to include payments as taxable income.
Individuals presently in a divorce proceeding should meet with their tax advisor to discuss the new divorce tax laws or contact our office for a consultation at (727)845-4166.