Time is running out for couples looking to finalize their divorces before new alimony law goes into effect on January 1, 2019. Once it does, the paying spouse will no longer be able to use the amount that they pay as a deduction on their taxes. The recipient ex-husband or wife will no longer have to pay taxes on payments received anymore either.
For decades, the aforementioned tax policy has been the norm for how spousal support payments are handled by the Internal Revenue Service (IRS).
Any couples who divorce on or before December 31, 2018 will continue to be allowed to handle alimony payments as described above, or they can choose to handle them in accordance with the new law.
Under the new law, alimony will no longer be a deductible expense on the paying spouse’s taxes. The recipient spouse won’t have to pay any income taxes on the amount received either.
If an ex-couple wants to continue to have their alimony payments handled in accordance with the old law, then the IRS will require them to do certain things.
First, they will be required to continue filing their own individual tax returns. They’ll also need to continue making spousal support payments in accordance with their separation agreement or divorce decree. The method of making these payments must continue to be in the form of cash, money order or check. A couple must also be living apart if they’ve filed for legal separation.
Receipt of spousal support is not automatic nor guaranteed as often times child support is. Instead, whether an ex-husband or wife qualifies to receive spousal support is completely contingent upon a number of factors including how long a marriage lasted, the roles of each party in the marriage and job and health prospects of each spouse. A Kissimmee alimony attorney can discuss your chances of receiving a spousal support with you.