Under the GOP’s new tax bill, spouses who pay alimony will be unable to deduct these funds from their taxes. Currently, spouses who pay alimony can deduct these payments from their income, lowering their taxable exposure. Such deductions often eased the pain for the paying spouses.
Like with most changes from Washington, D.C., there is good news and bad news. The repeal of the alimony deduction doesn’t apply to dissolution agreements made before December 31, 2018. However, starting in 2019, all divorce agreements requiring alimony payments will not allow the payor spouse to lower their income tax exposure.
Many family law practitioners worry this change may have a trickle-down effect, particularly, the fear comes in increased litigation over alimony itself, along with increased acrimony in such areas as equitable distribution. The increase in taxes could also serve to lower the amount available to children in child support calculations.
Like with most new changes, time will tell what the effect this alteration will have for Florida divorces. However, one thing is clear, if you are contemplating a divorce in the near future, and the prospect of not being able to deduct your spouse’s alimony payment is important to you, you should see a seasoned family law attorney soon.