The Tax Cuts and Jobs Act (TCJA), the massive new tax law enacted by Congress in 2017, permanently eliminates the deduction for alimony payments made for people who get divorced in 2019 and later. Moreover, alimony recipients will no longer be required to pay tax on their alimony payments or include them in income.

When did alimony become deductible?

Alimony may be tax-deductible, but only if you finalized your divorce or support agreement before January 1, 2019. On December 22, 2017, the President signed sweeping tax legislation into law.

Are alimony payments deductible in 2019?

Beginning Jan. 1, 2019, alimony or separate maintenance payments are not deductible from the income of the payer spouse, or includable in the income of the receiving spouse, if made under a divorce or separation agreement executed after Dec. 31, 2018.

How is lump sum alimony payment calculated?

Lump-sum spousal support is calculated by multiplying the monthly amount owing pursuant to the SSAGs by the duration (the number of months for which support is payable) and then discounting for tax consequences and other factors.

How are alimony payments supposed to be deductible?

The issue: Specific tax-law requirements must be met for payments to qualify as deductible alimony. It’s not enough for your divorce papers to say that certain payments are supposed to be deductible alimony. The intent of you and your ex is irrelevant.

When do you get a permanent alimony award?

Finally, permanent alimony is usually reserved for marriages lasting longer than 17 years when one party lacks the ability to provide their own financial support, and requires the court to make a specific finding that no other type of alimony is appropriate. When Do Payments Start?

Can You claim an alimony payment as equalization?

A $40,000 equalization payment to his soon-to-be-ex. The settlement stated that the $40,000 payment was “for equalization of the distribution of marital assets.” In other words, it was intended to achieve an equitable split of property. The taxpayer claimed an alimony deduction for the payment.

When does an alimony settlement in Florida end?

According to the court, the requirement that the payment obligation must cease if the former spouse dies was not met because: The settlement agreement was silent on the subject, and Under Florida state law, the taxpayer’s payment obligation would not have terminated upon the death of his ex-wife.