Although we’ve talked extensively about the subject of spousal support, the tax rules associated with the spousal support have just been upended by new legislation in Washington, DC.
In this issue, we’ll go over the changes in spousal support and explain why some folks won’t see changes at all.
Explaining Spousal Support in California
As we wrote previously, spousal/partner support are interchangeable terms used to describe payments from one spouse to another after divorce. Its overall goal is to ensure that both partners are able to adjust to life after marriage without another sudden jolt to their lifestyle.
Typically, the length of the marriage itself determines how long a person has to pay spousal support. For example, in cases where the marriage lasted 10 years or less, spousal support will usually last no longer than half that time. If the marriage was longer than 10 years, there’s often no firm end date.
How has spousal support been changed?
It’s not spousal support per se that’s been changed, but rather its associated tax rules. Before the new legislation, the person paying the spousal support could deduct it from his or her taxes, while the one on the receiving end of spousal support had to report it as taxable income.
The new rules, however, mean that the payer of spousal support no longer has the associated tax deduction and the one receiving the payments does not have to pay taxes on it.
Who won’t see changes in spousal support?
The new rules for spousal support taxation take effect on divorces finalized on Jan. 1, 2019 and after. Many tax specialists are still scratching their heads over whether or not spousal support agreements that are modified after the rules become active will be subject to the new tax law.
Does this mean I’ll have to pay more in spousal support?
Not necessarily. In fact, because those who pay spousal support will no longer have the tax deduction, a reasonable argument may be made by the payer that the previous agreement is no longer affordable.
Of course, if you’re paying or receiving spousal support – or feel that you will in the future – it’s best to talk with a tax preparer.
Facing Divorce in San Diego? Call The Men’s Legal Center
If you’re a man facing divorce, we urge you to get in touch with us here at the Men’s Legal Center. Our sole purpose is to make sure men have the resources and knowledge they need for the best possible outcome in family court.
You can reach us at 619-234-3838 or via email.