Advertisement
alimony

Under the New Tax Law, Is My Alimony Tax-Free?

The new policy goes into effect in 2019. Older divorces can be modified to follow the new rules—if both parties agree.

Note: The editors of Kiplinger's Personal Finance magazine and the Kiplinger Tax Letter are answering questions about the new tax law from subscribers to our free Kiplinger Today daily email. See other reader Q&As about the new tax law, or submit your own question.

Question: I understand the new tax law reverses the rules for alimony, so that the payer no longer gets to deduct payments and the recipient no longer has to pay tax on alimony received. I was divorced in 2016. Does this mean the alimony payments I get are tax-free from now on?

Advertisement - Article continues below

Answer: No. The new rule does not go into effect until 2019, and only for divorces executed or modified after 2018. For divorces after December 31, 2018, alimony payments are no longer deductible nor must the recipient declare the amount as taxable income. The law specifically permits ex-spouses to modify an earlier divorce agreement to adopt the new rule after it goes into effect in 2019. Of course, both you and your ex would have to agree to such a change. If a pre-2019 divorce is not modified, the old rules apply: the payer can deduct payments and the recipient must pay tax on them.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
HSAs Get Even Better
Financial Planning

HSAs Get Even Better

Workers have more options with flexible spending accounts, too.
July 2, 2020
17 States That Will Gain or Lose Electoral-College Votes After the 2020 Census
Politics

17 States That Will Gain or Lose Electoral-College Votes After the 2020 Census

Every 10 years, the 435 seats in the House of Representatives are reassigned based on the results of the U.S.
July 2, 2020

Recommended

How to Get an Extension for Filing Your Tax Return
tax deadline

How to Get an Extension for Filing Your Tax Return

If you can't wrap up your tax return by the July 15 deadline, it's easy to buy yourself more time.
July 7, 2020
Tax Tips for Last-Minute Filing
tax deadline

Tax Tips for Last-Minute Filing

As you rush to meet the July 15 tax filing deadline, here are some pointers to bring your stress level down.
July 7, 2020
20 IRS Audit Red Flags
tax returns

20 IRS Audit Red Flags

There's no sure way to avoid an IRS audit, but these red flags could increase your chances of drawing unwanted attention from the IRS.
July 1, 2020
10 IRS Audit Red Flags for Retirees
retirement

10 IRS Audit Red Flags for Retirees

Watch out: These things can increase the chances that the IRS will give your tax return a closer look.
July 1, 2020