The Tax Cuts and Jobs Act of 2017 provided that alimony and separate maintenance payments will not be deductible by the payor, and repealed the rule that a recipient of alimony and separate maintenance payments must include such amounts in income. When this new rule comes into effect in 2019, income used for alimony payments will be taxed at the rates applicable to the payor spouse rather than the recipient spouse. The new law is effective for any divorce or separation instrument executed after December 31, 2018 or for any divorce or separation instrument executed on or before December 31, 2018, and modified after that date, if the modification expressly provides that the amendments made by this change apply to such modification.
- Defining alimony, property settlement, and child support
- Changes in the tax treatment of alimony for 2019 and after and how such changes impact the financial negotiating strategies of divorcing parties
- Effective date of the new rule
- When should parties to a pre-2019 separation agreement or divorce decree elect treatment under the new rules
- Understand and counsel clients on the tax treatment of alimony and child support payments under the Tax Cuts and Jobs Act of 2017
Tax practitioners who anticipate advising clients with respect to the tax implications under both existing and separation agreements and divorce decrees entered into after 2018
A basic understanding of the tax rules relating to individual income tax