The spouse paying alimony has been able to deduct the amount paid on his/her tax return and the spouse receiving it must report as income. However, for future divorce actions beginning in 2019 the spouse paying the alimony will not be able to deduct it and spouse receiving it will not have to report alimony as income. As a result, more people who are likely to pay alimony will likely try and get their divorces finalized with alimony in 2018.
This change may make parties more likely to resist paying alimony and/or negotiate for lower payments. There will also be less money for a family going through a divorce and more money for the government.
In most instances, the spouse paying alimony is in a higher tax bracket than the spouse receiving alimony. Massachusetts has an Alimony Reform Act that will need to be changed because it considers the alimony deduction as part of the agreement.
The implications of these changes combined with the new 2018 Mass. child support guidelines should be reviewed with an attorney. It is important to keep up with the changes and how they may impact your situation, including; the probable elimination of unallocated family support; the reduced flexibility in settlement talks; and the impact on some means tested public programs.