Existing Alimony Deduction Repealed Under New Tax Law
Under Ohio divorce decrees, alimony (spousal support) payments have been typically deductible to the payor and taxable to the recipient. The income tax treatment of these payments has been a significant factor in negotiating the amount of alimony. For new divorce cases not completed before January 1, 2019, these payments are now "neutral" per the new Tax Cuts and Jobs act. The existing alimony deduction has been repealed. This means that newly divorced individuals will not enjoy the benefits/burdens of alimony taxability (unless there was a executed separation agreement preserving such previous tax treatment signed prior to the end of last year).
A New Frontier For Operating Under The New Tax Law And Divorce In Ohio
What does this mean for individuals now in the process of divorcing or who get divorced after the Tax Cuts and Jobs Act in 2019? Essentially, we are now in the infancy of operating under the new tax law and divorce Courts are evaluating a fresh and starting to formulate new positions/practices. In Ohio, there is not a statutory guideline for setting alimony amount payments as there is for the payment of child support. Instead, … Read More... “Ohio Alimony Revisited Under the New Tax Law”