Tax Reform Bill Passed By US House Eliminates Tax Deduction For Alimony

For those who are currently paying alimony or have a potential alimony obligation in a pending divorce action, the tax reform bill recently approved by the U.S. House of Representatives would eliminate the tax deduction for alimony.

Alimony payments are presently deductible by the payor and typically result in a reduction of the payor’s taxable income so long as they meet the IRS eligibility requirements. 

While alimony is currently taxable as income by the alimony recipient, the House bill, however, also makes alimony tax-free to the recipient. 

According to a recent Linkedin article posted by Harlene S. Stevens, CPA and manager at Nisivoccia LLC, alimony would be one of the deductions to be repealed, although “as with any proposed legislation, there are sure to be many changes before the ultimate law is passed.”

By the same token, consideration of alimony is highly fact-specific and dependent on a variety of considerations in each divorce action.

For more information, please call or email me directly at mh***@mi************.com.

 

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