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Spousal support tax law about to change

The year is rapidly drawing to a close, and as it ends, so does a tax deduction that has been used in divorce settlements. Spousal support is an amount granted to the lower-earning partner in a divorce settlement in Georgia. Until Jan. 1, 2019, that amount is tax deductible to the person paying it.

Spousal support is often an issue in divorces involving high-income couples. In many divorces, child support is the primary concern, and judges will address that first. Depending on the amount available, there may not be money left for spousal support. Soon-to-be ex-spouses can also accept shares of retirement accounts or property in lieu of spousal support payments.

The current tax deduction enables the person paying support to deduct the amount from one's taxable income, and the person receiving the support pays income tax at his or her rate. On Jan. 1, the payor can no longer deduct the amount, and the payee will no longer pay tax on the amount received. Since the payor's tax liability will go up, court-ordered support payments may decrease, as the amount available for support will decrease as the result of a higher tax bill.

A person contemplating divorce in Georgia may want to seek the counsel of an experienced family law attorney regarding spousal support. A knowledgeable attorney may be familiar with the new tax law and can advise the client on a prudent path to pursue that is fair and equitable to the parties involved. The lawyer will always work for the best interest of the client.

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