The new tax bill for the United States was just passed and it impacts a lot more than many people may realize. The bill, known as the Tax Cuts and Jobs Act, will impact anyone who gets divorced on or after January 1, 2018, and is obligated to pay alimony. Though this legislation makes changes to many different aspects of taxation, anyone who is obligated to make alimony payments will see big changes.
The Current Law
The current laws regarding the taxation of alimony state that the recipient can include the payments they receive as part of their gross income. In addition, the alimony payments were tax deductible for the individual who has to pay them.
Changes to the Law
Beginning in 2018, any divorce that takes place and has an alimony obligation will not get to reap the same tax benefits as divorces that took place previously. The individual who is required to make alimony payments will no longer be able to use this as a tax deduction. The person who makes payments will have to be taxed instead of the individual who receives alimony.
If you are considering a divorce in 2018, it is important that you speak with an experienced divorce and family law attorney who can help you determine how these changes may impact you.
Paris P. Eliades Law Firm, LLC is a divorce and family law firm serving clients in Sussex, Morris, and Passaic County and throughout New Jersey with compassionate, quality legal services. Contact our office today for a free initial consultation.