Angel Kane, Attorney
Alimony Taxation: What you should know
Signed into law on December 22, 2017 the “Tax Cuts and Jobs Act of 2017” makes changes to the existing tax code. One of the important implications for our clients is the changes to alimony.
Under the previous law, alimony was deductible by the spouse paying alimony (the obligor). Alimony received was considered taxable income on the tax return of the spouse receiving the spousal support (the obligee). Accordingly, such alimony was taxed as the oblige spouse’s income.
The 2017 Tax act now changes this law going forward. For divorces after December 31, 2018, alimony paid cannot be deducted by the obligor spouse. At the same time, the obligee spouse does not have to pay taxes on alimony received.
This is a marked change in the existing tax laws regarding alimony, which has been the norm for seventy-five years. It is important to note that the new law only affects divorces entered after December 31, 2018.
If you have any questions about divorce or alimony, contact Angel Kane at (615) 444-8081.