Rose Law Group Reporter
For taxpayers who sign divorce agreements after December 31, 2018, alimony will no longer be deductible by the payor or taxable to the recipient. For existing agreements that are modified after that date, the parties may expressly choose to adopt this new rule. If they do not, alimony on agreements entered into before December 31, 2018, but modified after will continue to be deductible by the payor and taxable to the recipient.
Clients may wish to consult with family law counsel to determine whether a divorce decree may be modified to take into account the new tax law relating to alimony payments.
“I was relieved to see the last-minute change to extend the effective date to January 1, 2019. The extension of the effective date gives family law practitioners a chance to breathe and gives them more time to plan for current and future clients with regard to settlement strategies.”