People who are divorcing will sometimes want to know whether they qualify for alimony or not. The laws in New York regarding spousal support payments are strict, so not everyone will qualify. Some individuals might be able to work out these payments as part of the divorce settlement. Anyone who is involved in a divorce that may include alimony should understand how these payments might affect them in the future.
One aspect of alimony that some people don’t understand is how it affects their taxes. The Tax Cuts & Jobs Act of 2017 made a big change to this. People who filed for divorce prior to Dec. 31, 2018 are subjected to the old law. Anyone who filed for divorce after that date must follow the new law. In some cases, divorces that are modified after that date will be subjected to the new law once the modification is finalized.
The new law prohibits the payer of alimony from claiming the payments as a deduction in order to receive a tax break on the payments. The person who receives the payments no longer has to claim the payments as income, as well.
The new law is in effect through at least 2025, but it may be extended, so it’s imperative that individuals who need to file for a divorce around that time keep an eye for updates on the law. Your attorney can help you to determine what options you have regarding alimony, as well as how each one can impact you. Be sure that you fully understand the options so you can do what you feel is in your best interests.