Big changes are taking effect this month regarding how alimony will be awarded in divorce cases. The new year is bringing legal changes that will impact couples divorcing after January 1, 2019. With the changes, alimony will no longer be tax deductible or taxable to the recipient spouse. Actually, alimony will cease being a taxable event at all. As MarketWatch points out, this is a major transition, as “Before the Tax Cuts and Jobs Act (TCJA) was enacted, payments that met the tax-law definition of alimony could always be deducted by the payer for federal income tax purposes. The recipient had to report the money as taxable income.”
A new normal for alimony
What does this mean practically? Judges will be encouraged to change alimony awards to only rehabilitative alimony. Rehabilitative alimony means that the alimony payment is reduced to a finite number of years, most often to mirror the length of the marriage. For example, a spouse who was married for five years will most likely be awarded alimony for five years. According to DivorceSupport.com, the idea behind rehabilitate alimony is to allow the recipient spouse a rehabilitative period to secure a stable lifestyle and support themselves financially, whether through career advancement or education. Ideally, alimony is put into place with the intention of allowing the recipient spouse to become completely self-supporting. DivorceSupport.com goes on to say that rehabilitative alimony is “based upon certain termination criteria, like but not limited to, remarriage and/or gaining employment. The wife may need a certain amount of time to gain employment in a career-oriented position. This may be possible, but only if she first goes to school, this may take two years.”
Some people might object to the term “rehabilitative” because it implies that the receiving spouse isn’t capable of making a living during the time of the marriage. However, we use the term because of its common usage common legal vocabulary. And while it doesn’t necessarily refer to a lack of ability on the side of the receiving spouse, it does hint at the fact that often in marriages, one partner may put certain career advancements or educational pursuits on hold in order to take care of children or otherwise support the family in a sacrificial way.
As the new normal, rehabilitative alimony will stand in stark contrast to other forms of alimony such as permanent alimony, which, according to LiveAbout, “continues until the death of the payor, the death of the recipient or the remarriage of the recipient. In some cases, it can continue after the remarriage of the recipient.”
What doesn’t change?
A lot is changing in the world of alimony, but some essential aspects are staying the same. The awards still must meet the two-prong test of 1) payor’s ability to pay and 2) recipient’s proven need for alimony.
How can we help?
If you’re considering a divorce, or currently going through one, The Zwiebel Law Firm can help answer your questions regarding alimony. Whether you’re the one receiving alimony or the one paying it, we can help you navigate changing laws and shifting expectations regarding alimony, and we can help make sure the results of your case are fair. Don’t wait to get clarity and satisfactory results! Call us or contact us online to set up a consultation!
The Zwiebel Law Firm, LLC
826 Columbiana Road
Birmingham, AL 35209
Phone: (205) 623-1001