Amanda Crowell Partner
Is My Alimony Still Tax Deductible in 2019?
As of January 1, 2019, the law has changed in regard to tax implications when it comes to alimony. A spouse who is either ordered to pay alimony or who receives alimony will no longer be allowed to claim the alimony as income or list the alimony as a deduction when it comes to taxes. Prior to January 1, 2019, the spouse receiving alimony was able to list it as taxable income and the spouse paying alimony was able to list it as a deduction, but this is no longer the case. This will apply to all alimony orders that are entered after January 1, 2019. This new change in the tax law will not apply to any Orders for alimony that were entered prior to January 1, 2019.
This change in the tax law is significant due to the fact that generally the spouse paying alimony has a higher income and is paying taxes at a higher rate. The spouse receiving alimony would have been in a lower tax bracket and would pay tax on the alimony received at a lower rate. So, the tax deduction for alimony payments was saving money between two spouses. Thus, the new tax law may lead to a reduction in the amount of alimony that is awarded. It is imperative that these tax law changes be considered when considering alimony in a divorce case.
At Kane & Crowell Family Law Center, we are able to work with your accountant before trial or mediation to make sure all tax issues are handled correctly. For any further questions about how this may affect your alimony, contact Amanda Crowell at Kane & Crowell Family Law Center at www.kane-law.com or by phone at (615) 784-4800. We handle cases in Wilson County, Sumner County, Trousdale County, Macon County, Smith County, and Rutherford County and are happy to put our experience at work for you.