Divorce is not easy and is seldom entered into lightly. There are many issues that must be considered, including property division, child custody if there are children involved and financial matters. Under the new tax law, the financial issues in Georgia divorce proceedings may become more complex, in particular where alimony is concerned.
Under current divorce law, those paying alimony to an ex-spouse can typically deduct the amount of the alimony payments on their tax returns. The recipient of the alimony must report the payments as income for tax purposes. This has the effect of sometimes promoting financial settlements in some divorces, as those paying the alimony will see their tax liability reduced.
This changes under the new tax law. The alimony provisions, however, do not take effect until Jan. 1, 2019. Those paying alimony from that date forward will no longer be able to deduct the payments on their tax returns. The recipient will no longer have to report the alimony payments as taxable income.
There are existing guidelines to assist in determining monetary amounts to be paid to an ex-spouse. These guidelines may need to be revised. Anyone who finds him or herself in a situation where divorce is a possibility and spousal support may be warranted may benefit by becoming familiar with the tax implications of the new law on alimony payments in Georgia. While this can be a very difficult and stressful time, seeking the advice of an attorney can ease the tension and increase the possibility of a favorable outcome.
Source: Chicago Tribune, “What could make divorces more contentious? The new tax law“, Ally Marotti, Accessed on March 2, 2018
