New law stops alimony as tax deduction

New law stops alimony as tax deduction. (Source: WEAR-TV)

A new law went into effect January 1st bringing sweeping change to alimony payments and how it affects your taxes.

Now anyone who is divorced and ordered to pay alimony will not be able to file it as a federal tax deduction and those receiving the payments will not have to pay taxes on the income.

The new law is the result of the 2017 Tax Cuts and Jobs Act, signed into law by President Trump.

Being able to claim alimony as a tax deduction had allowed some people to qualify for a lower tax bracket, according to Pensacola Family Law attorney Autumn Blackledge.

“As we've been trying to settle cases there have been spouses that are higher paying and knew they were going to be obligated to pay alimony who were really rushing a settlement and the recipients kind of delaying so they didn't have to pay taxes on it,” Blackledge said.

Many people in Pensacola we spoke to, like mother Yolanda Stallworth, were unsure about the changes.

"If my son had to pay alimony, I wouldn't be too happy about it,” Stallworth explained.

But as someone who is divorced Stallworth sees both sides and ultimately is against tax deductions for alimony.

“I don't see the benefit of someone getting a break for something that's actually a penalty,” Stallworth said.

Channel 3 News also spoke to Anne and Tom Demske, who have been married for almost 49 years. They are both in favor of the new law and offered some advice for couples in 2019 to avoid the issue of alimony altogether.

“A happy life is a happy wife,” Tom Demske said. “A happy wife is a happy life,” Anne Demske expressed.

The law will not impact cases before January 1st, 2019. It will only affect cases moving forward.

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