Today, the government passed the Tax Cuts and Jobs Act. This impacts many different areas of the lives of taxpayers, including those who are divorced with alimony obligations. Up until December 31, 2017, the current law that states alimony is tax deductible to the spouse who is obligated to make these payments and the spouse who receives the payments can include them in his or her income. Of course, with the changes in the law, things are going to be a bit different for those who pay and receive alimony in 2018.
The new tax laws will not allow the alimony payments to be tax deductible. In addition, the recipient of the alimony payments will not be able to include them as part of their income. The individual who pays the alimony will be taxed instead. These changes only apply to divorce agreements that are signed on January 1, 2018, and after.
It will be interesting to see how the changes to alimony protocols will impact the New Jersey courts’ decisions to award alimony or not. It is important that couples going through divorce make themselves aware of the tax implications that divorce and alimony currently have and may have in the future. If you are considering divorce or are facing an alimony matter, contact our firm today for strong legal representation.
Ross and Calandrillo, LLC is a full-service divorce, family, and real estate law firm in Mountainside, New Jersey. For strong legal representation in all of your family law matters, contact Ross and Calandrillo, LLC to schedule a consultation.