At the end of last year, Congress adopted a number of changes to the tax code that impact people who are divorced. Chief among them are the following:
1. NEW alimony orders entered beginning on January 1, 2019 will be treated differently in that alimony payable under those order will NOT be deductible to the payor and taxable to the payee;
2. Beginning on January 1, 2018, the dependency exemption has been “suspended” long-term, meaning that regardless of the language contained in an agreement, neither parent can claim the child(ren) as a dependent(s);
3. For some parents, child credits remain available and may be negotiated.
However, alimony orders entered prior to January 1, 2019, remain deductible to the payor and taxable to the recipient.
As a result, the negotiation of alimony has become more complicated!
The Massachusetts alimony statute has not been modified to reflect this change in federal law, which means that how Probate and Family Courts will determine alimony in contested situations beginning on January 1 is virtually unknown. Whether you receive or pay alimony, or whether alimony is an issue to be addressed in the future, Attorney Sullivan can advise you about how these changes in federal law may affect you, and whether addressing these issues prior to January 1, at least relating to alimony, might benefit you.
