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New Tax Cuts and Jobs Act Affects Florida Spousal Support in 2019

One of the lingering side effects of the Tax Cuts and Jobs Act laws developed during the Trump Administration that went into effect in 2018 is the tax implications to divorce decrees that contain spousal support agreements signed throughout the nation after January 1, 2019.

The tax deduction that was once enjoyed by the payer is no longer applicable. The change places the advantage in favor of the support recipients, as they will no longer have to count the payments as income, which may considerably lessen their taxable revenue.

What Does the Change In Spousal Support Payments Mean for Floridians?

All divorces that have been or are legally finalized with a spousal support agreement in place before January 1, 2018, allow:

  • Payers to treat spousal support payments as a tax-deductible expense on their annual income tax returns
  • Recipients to treat spousal support payments as income, and must pay taxes on the amount received throughout the year

The new law that went into effect on January 1, 2019, only applies to divorces that include a spousal support agreement that is finalized after that date, and:

  • Does not allow the payer to take the spousal support deduction
  • Does not require the recipient to count the payments as income

Quick Guide: Who is Affected By The Spousal Support Tax Change in Florida?

If you had an alimony or spousal support agreement in place that meets all of the requirements for tax deduction before December 31, 2018, nothing changes for you. Payers and recipients who are already divorced, or who finalize their divorce before January 1, 2019, will pay their taxes under the existing rule.

If your divorce is finalized with a spousal support agreement AFTER January 1, 2019, the new tax law applies to you, so you cannot take the tax deduction as a payer. And if you are the recipient you do not have to count the payments as income. Also, if your spousal support agreement is modified AFTER January 1, 2019, the new law will apply to your case.

Eligible Spousal Support Tax Deductions Only Apply to Divorces That Are Finalized Before January 1, 2019

If you are the payer, you have an approved spousal support agreement that is eligible for a tax deduction if the following is true:

  • You have a written divorce decree in place that states the payments will be made as spousal support
  • Payment must be made out to, or on the behalf of the ex-spouse or an authorized third party, including an attorney or mortgage lender as stated in the agreement
  • Payment must be stated as alimony, and cannot be labeled as child support or under other labels
  • You do not live in the same household as your ex-spouse, and do not file your taxes jointly
  • Payments are made in cash or as a cash equivalent
  • You list your social security number on your tax return
  • You make no obligations to continue payments after the ex-spouse’s death

These qualifying deduction requirements only apply to divorces that are finalized with spousal support agreements in place BEFORE January 1, 2019.

Contact The Law Firm for Family Law With Divorce and Spousal Support Questions Today

The new spousal support tax law became effective on January 1, 2019, and if you are concerned with how it will affect your divorce or finances, contact our spousal support attorney at The Law Firm for Family Law in Clearwater, Florida today at (727) 619-1342 to learn how we can help.

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