2019 New Family Law Changes

In this article, we’ll take a look at the family law changes that will go into effect in 2019. For couples living in New York and pondering about splitting up, divorcing will become a lot messier than ever. In accordance with the current alimony deduction, a spouse that’s paying support is eligible for deduction when they file their taxes. The spouse receiving the alimony pays taxes in accordance to their own individual income. This law was passed to save money for couples and making the transition as easy for the spouses.

However, it’s believed the new tax law and alimony rule will discourage spouses that have higher income. Henceforth, it wouldn’t be a surprise to see divorce cases end up becoming more convoluted than ever. Essentially, the new law is going to be taking away the incentive that use to be available for divorcing spouses.

The spouse that’s going to be paying alimony will discover the income won’t be eligible for a tax deduction. As far as the spouse receiving the income, they will no longer need to pay tax on the alimony payment. The initial reaction was a good thing for the receiving spouse; however, it is not. The result of the total money available for both spouses will shrink. The support reduction will affect the lives of the receiving spouse and children. In addition, the new family law will prevent the opportunity of the unemployed spouse to make contributions towards and IRA. This is because the spouse won’t be paying taxes on the alimony, therefore they won’t be eligible for a retirement savings plan. This may have a significant impact on the receiving spouse’s financial future.

This new family law will be incorporated into the Tax Cuts and Jobs Act. For the couples who have entered into a divorce agreement before December 31st, 2018, there will not be a change into their existing agreement. For this reason, there was a resurgence of couples rushing to finalize their divorce agreement before the end of 2018.

Finally, for the spouse providing alimony support who decides to pay through his/her retirement account, the receiving spouse will have to pay tax on the amount. Essentially, this would be replicating the same old system.

Originally published at theresakellington.com on May 29, 2019.