A new law affecting many couples getting divorced in Illinois and all around the nation will go into effect on Jan. 1, 2019. The law addresses how alimony will be taxed for both the payer and the recipient. The current law has been in place for 75 years, making the upcoming changes in the Tax Cuts and Jobs Act rather significant to those involved.
Currently, someone paying alimony is able to deduct the amount from his or her taxable income. Also, those receiving the payments must pay taxes on them at this time. However, this will be reversed for those divorces that become final in 2019 and after. Many matrimonial lawyers believe that this change will make divorce settlements more contentious in the future. A survey conducted by an association of marital law attorneys showed that 95 percent of them predict that the new law will change the divorce settlement process.
If a divorce is finalized before Dec. 31, 2018, it will be grandfathered into the current law. Some couples are making attempts to accomplish this, if possible. There is a belief among experts that alimony payments will not be as high going forward since the tax deduction will be eliminated.
Alimony is just one of the many issues that must be resolved when an Illinois couple decides to get a divorce. To ensure that one's interests are protected in the deliberations, it is imperative to seek the guidance of an experienced divorce attorney. A knowledgeable lawyer will work with clients to seek the most favorable outcome possible in the divorce proceedings.