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Ohio family law: Will the alimony tax deduction soon be gone?

On Behalf of | Nov 10, 2017 | Family Law

According to a recent news article, in 2015, roughly 800,000 couples in the United States filed for divorce. That is a lot of people, young and old, with and without children, who had to figure out how to start over, which is not an easy task. Many of those individuals in Ohio and elsewhere who were economically dependent on their former spouse required alimony in order to help them with their transition, and they were able to get it by negotiating terms without having to litigate their cases. Thanks to a tax plan that is currently being reviewed, spousal support may be something that those requiring it may, with the assistance of a family law attorney, have to fight harder to receive.

As it currently stands, those who pay alimony may claim those payments as a deduction on their income taxes. This is a big deal. For the average American, it makes paying alimony a bit more affordable.

Section 1309 of the Tax Cuts and Jobs Act, if passed, will eliminate this tax deduction. This will hurt those ordered to pay alimony and those on the receiving side. For those ordered to pay, losing this tax deduction means alimony could end up costing them thousands more a year — something that may not be affordable. For those on the receiving end, it may be a bigger fight to not just get spousal support, but also to achieve an amount that is really helpful.

Why would the GOP want to pass this significant divorce penalty? It is believed that it will amount to approximately $8 billion in revenue over the next 10 years. While this may seem good from a government standpoint, it may financially devastate families in Ohio and elsewhere. Whether this law passes or not, those going through the divorce process can turn to a family law attorney in order to help them fight for or against including alimony in their final dissolution agreements.

Source: Bloomberg, “The GOP Tax Plan Could Make Your Divorce More Expensive“, Tom Metcalf and Christie Smythe, Nov. 8, 2017