When people have been married for a significant length of time and decide to get divorced, courts will often require that some form of spousal support be paid. This is especially the case for couples in New Jersey where one of the individuals was the primary breadwinner and the other was tasked with raising children or being a homemaker. In these situations, courts weigh several factors in determining an alimony payout. Agreements have the option to be modified if certain criteria are met.
For many years, people who pay alimony have had the option of writing their alimony payments off on their tax forms. Under the new Tax Cuts and Jobs Act, all alimony agreements that are made during the year 2019 are no longer tax-deductible. The new law was discussed heavily in the year 2018 but never took effect until 2019. People should also be aware that if they chose to modify their alimony agreement this year, they will also be unable to deduct any subsequent alimony payments from their tax forms in the year 2020.
Another interesting change is that people who are on the receiving end of alimony payments cannot classify these payments as income. Previously, this was a right they had, but under the new law, this is no longer an option. People who are either making alimony arrangements this year or working to modify their current arrangement would benefit from understanding how this law will affect them and their situation.
When people are in the process of getting divorced, an attorney may be able to provide them with emotional support and give them helpful guidance. With the help of an experienced legal professional, people may be able to lessen the impact their divorce has on their future.
Source: MSN: “No More Alimony Deduction and Other Ways Your Taxes Will Change in 2020,” Karla Bowsher, Dec. 6, 2019