The recently passed GOP tax bill will have a devastating effect on people making maintenance payments to their ex-spouses.
Family law practitioners carefully followed the tax bill as it made its way through the House and Senate because the bill eliminates maintenance (also known as spousal support or alimony) deductions that the payor can claim on taxes each year. Currently, the paying spouse’s income is reduced by the maintenance paid, which will no longer be the case if the bill is signed into law.
Interestingly, we recently learned that the change and elimination of the maintenance deduction will go into effect for Agreements or Orders made after December 31, 2018. Of note, this is not a retroactive bill and there would be no effect on Agreements or Orders in effect prior to December 31, 2018.
Hundreds of thousands of Americans will likely be affected by this change once it goes into effect in 2019. Approximately 800,000 people divorced in 2015, and the divorce rate among some age groups is only rising. One divorce attorney estimated that this new law will cost people paying maintenance anywhere from $4,000 to $5,000 on average.
At The Harris Law Firm, our Colorado divorce lawyers keep a close eye on legal changes that could affect our clients, and work tirelessly to alter our strategy to best take advantage of those changes. If you are looking to hire passionate and experienced legal representation to help you manage your case, give our firm a call at (303) 622-5502 to discuss your situation today, or fill out our online form to set up a private consultation.