It’s only a matter of time before divorce lawyers start thanking the recently passed tax bill for all their new clients. Experts believe that changes to the way alimony is taxed will lead to a spike in divorces. This is likely due to the fact that anyone that was putting off divorce because of the fear of alimony is probably not going to want to wait any longer.
The new tax law eliminates the tax deduction for an alimony paying spouse, while also re-characterizes the payment to no longer be considered income for the recipient. The catch, and the fact that current payers of alimony will be pleased to hear: the law will not apply to divorces or separations signed before 2019. However, that 2019 deadline means that individuals that were putting off divorce for financial reasons might be rethinking things.