Gross McGinley LLP

gross-headerimg-1
Blog Disclaimer

Blog Disclaimer

This Blog is intended for educational and informational purposes and intended to only provide you with a general understanding of the law, not to provide any legal advice, including on the subject of the Blog. Laws that may pertain to this Blog will vary by jurisdiction, and the information on this blog may not apply to you. The content within this Blog is not intended, and should not be construed, in any way to be legal advice and thus you should not rely on any information provided in the Blog as legal advice. You should consult with appropriate legal counsel concerning any issues for which legal advice may be needed. Your review or use of the Blog and the content therein is not intended to create, and does not constitute, an attorney-client relationship. Please contact us if you have any questions about a Blog or would like more information, but, by contacting us, no attorney-client relationship is formed between you and Gross McGinley, LLP, including the Blog author. Do not send any confidential information to Gross McGinley, LLP or the authors of the Blog without first speaking to one of our lawyers and receiving our permission to provide confidential information. Unsolicited confidential information sent to us may not be subject to an attorney-client privilege and may not be treated as confidential. This Blog is not published for advertising or solicitation purposes. Gross McGinley, LLP disclaims all liability to all persons for any claim, loss, liability or any damages that may arise in connection with the Blog and any content or information contained in the Blog. Even though we strive to create our Blog content based on our current understanding of the law, we cannot and do not guarantee that the content and information in the Blog is current, accurate, or complete. Gross McGinley, LLP owns the copyright in the Blog, which is protected by federal and state laws, including copyright laws. The Blog cannot be altered or modified in any way. A copy of the Blog may be used and printed only for personal, educational, informational and noncommercial purposes. The Blog cannot be used for any other purpose without the express permission of Gross McGinley, LLP.

Alimony No Longer Tax Deductible Under Proposed Tax Bill

Written by: Allen I. Tullar on December 18, 2017 | Category: Blog | Tags:

In 1942, Congress passed the Revenue Tax Act, which overruled the 1917 United States Supreme Court case, Gould v. Gould, holding that alimony is not taxable income. Since that time, payor spouses have been able to deduct alimony payments made to the other spouse. Now, the GOP drafted a tax bill which proposes to eliminate that tax deduction. Any alimony obligations currently in pay status are exempt from the proposed tax plan. Only individuals divorced or separated after 2017 would be subject to the new bill.

In theory, one can argue that the intended repeal is designed to provide tax relief to lower to wage spouses. Alimony payments will no longer have to be included as income. But, it is more likely that the actual outcome will end up hurting those lower wage spouses (primarily women) and exacerbate an already flawed system where women tend to fair economically worse than men in divorce.

Most family law practitioners will tell you (regardless of who they represent) that the existing tax deduction for payors is a powerful incentive to settle cases and to pay alimony in larger amounts and for longer periods of time than they would otherwise agree to do.

Another likely unintended but significant consequence is that high payor spouses, who would either still agree to pay alimony or may be ordered to pay, having lost the deduction, may be pushed into a higher tax bracket. This would have the effect of lowering their net income available for support and reducing the amount of alimony that can be paid to the financially dependent spouse.

But, in the end, because authors of the tax bill must locate new revenue to pay for the tax cuts, the estimated additional $100,000,000 in treasury revenue for the fiscal year of 2018 created by elimination of the deductions for alimony payments and the inclusion of those payments in gross income may prove too hard to resist.


Attorney Allen Tullar represents individuals in divorce matters as well as child custody, child and spousal support, and other family law matters.

Next Previous
View All Attorneys
View All Practice Areas
View Blog