What the 2017 Tax Law Means for Divorcing Couples
Currently the person receiving alimony pays income tax on the alimony received. The alimony payer is able to deduct alimony payments from his/her income, reducing the payer’s tax burden.
Beginning January 1, 2019, any alimony orders issued from that date forward, the tax burden for alimony will no longer shift from the payer to the recipient. Instead, it will remain with the payer, who is often in a higher tax bracket than the recipient. The new law could mean that the payer can’t afford to pay as much alimony because there is no tax break, and the recipient will receive less alimony.
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