The Tax Reform’s Effect on Spousal Maintenance
The new year brought new laws. One of the most highly publicized, and impactful new laws brought significant changes to the U.S. tax code. If you are an individual seeking divorce you may be affected by this new law.
Illinois’s spousal maintenance is based off combined income and years of the marriage. Individuals who finish their divorce after 2018 will encounter a huge shift in tax law with respect to tax treatment of maintenance (formerly alimony) payments, or court-regulated financial support from one spouse to another after divorce. The law reverses the concept that made maintenance payments deductible to the person making the payments, and income subject to tax to the recipient of the support.
Any divorce or separation agreement completed after December 31, 2018, is subject to the new law. Couples who have settled their divorces prior to December 31, 2018, will not be affected by the new laws.
The divorce process can be emotionally and economically difficult. If you are considering divorce or are in the process of one, contact our office for experienced, high quality representation.