Is My Alimony Tax Deductible?

As of January 1, 2019, alimony tax law has changed.

If you are paying or receiving alimony after January 1, 2019, you may question, “Is my alimony tax deductible? The short answer is that you will no longer be allowed to claim the alimony as income. Or list the alimony as a deduction on your taxes. Before January 1, 2019, the spouse receiving alimony could list it as taxable income. And the spouse paying alimony could list it as a deduction, but this is no longer true. This applies to all alimony orders entered after January 1, 2019. This new change in the tax law will not apply to any Orders for alimony entered before January 1, 2019.

This change in the tax law is significant since the spouse paying alimony has a higher income and is paying taxes at a higher rate. The spouse receiving alimony is generally in a lower tax bracket and would pay lower tax on the alimony received. So, the tax deduction for alimony payments saved money between two spouses. Thus, the new tax law may lead to a reduction in the amount of alimony that is awarded. When considering alimony in a divorce case, these tax law changes must be considered.

Questions about alimony?

At Kane & Crowell Family Law Center, we can work with your accountant before trial or mediation to ensure all tax issues are handled correctly. For further questions about how this may affect your alimony, contact Amanda Crowell at Kane & Crowell Family Law Center at www.kane-law.com or (615) 784-4800. We handle Wilson, Sumner, Trousdale, Macon, Smith, and Rutherford Counties cases. We are happy to put our experience to work for you.