news 9 months ago

GOP Tax Bill Scraps Alimony Deductions

Newser — Rob Quinn

America's biggest tax law overhaul in more than 30 years contains a provision that some experts say is going to make divorce a more difficult process—especially for lower-income couples.

The final version of the Republican tax plan removes the tax deduction for alimony payments, which are support payments generally made to an ex-spouse who earns less money, CNN reports.

Since spouses receiving the payments were typically in a lower tax bracket, divorce lawyers tend to "use this tax deduction as a way to make a settlement go down easier—because there was more money in the pot to be able to split up," says divorce attorney Lisa Zeiderman.



The deduction is used by an estimated 600,000 Americans. They won't be affected under the tax bill, which repeals the alimony deduction only for divorces that happen after Dec. 31 next years.

Zeiderman warns that without the deduction there will be "less money to go around" in future settlements, which could affect how child support, etc. is calculated.

The final House and Senate compromise version of the tax bill, which slashes the corporate income tax rate from 35% to 21%, was unveiled Friday. It is expected to sail through the House, though three Republican senators haven't committed to it yet and the GOP will need their votes to pass it, Reuters reports.

(Here's what else is in the bill.)

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