Since 1943, alimony has been deductible by the payor and included in the gross income of the payee. That all changed on January 1, 2019, when, under the new Tax Cuts and Jobs Act (TCJA), alimony payments made in accordance with a post-2018 divorce decree or separation agreement became nondeductible. The TCJA repealed I.R.C. § 71(a), which included alimony in a recipient’s gross income, and § 215(a), which provided the payor with a dollar-for-dollar, above-the-line deduction for the alimony paid. As the death of the alimony deduction approached on January 1, 2019, some anxious parties and practitioners anticipated the event with about as much enthusiasm as one would have for a zombie apocalypse. Moreover, unlike other Tax Code provisions impacted by the TCJA, the repeal of § 71(a) and § 215(a) is not set to expire in 2026. Thus, practitioners and clients alike will be adjusting to the new tax reality for the foreseeable future. But, with a little creativity and effort, everyone should survive.
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