You’ve probably heard about the significant changes in alimony law which took effect on January 1st of this year. Most people understand that the adjusted law will change a lot of things, but many people do not understand exactly who will be most affected. Expectations need to be adjusted and perhaps additional legal support needs to be requested for those going through or embarking on a divorce – especially for women.
What Changes Under the New Rules?
In short, the new law causes alimony payments to cease being tax-deductible for the payor, and to start no longer being taxable to the payee. Before the start of 2019, the exact opposite was true: alimony payments were tax-deductible payments for the payor and considered taxable income for the payee.
At first glance, it seems that the person receiving the alimony payments would be better off now under the new law. But while the payee won’t have to pay taxes on his or her alimony awards, the new law means that there will be significantly less alimony dollars to begin with.
However, despite all the changes, some alimony rules will remain the same. For example: courts will still decide alimony amounts based on the payor’s ability to pay and the recipient’s proven need for alimony. But the payor’s ability to pay aspect is exactly why there will be less total alimony dollars to work with. The cap on alimony payments will have to respect the payor’s ability to pay without the benefit of the payments being tax deductible.
Who Will Be Most Affected by the New Rules?
Legal professionals and divorce experts agree that it is women who will be most affected by the new tax law. According to CNBC, alimony recipients are still mostly women. CNBC goes on to cite a 2010 census which found that out of about 400,000 alimony recipients, only 3 percent were men. Research shared by The Guardian reveals that in general, women are hit harder by the long-term financial impacts of divorce. On the other hand, men tend to fare financially better after a divorce. If you are a woman considering divorce or currently going through a divorce, you’ll need to be prepared for a possible dollar drop in the alimony payments you were expecting.
How Can Women Get the Alimony Payments They Need?
Legal experts and financial advisors alike unite in saying that now more than ever, couples going through a divorce need to seek professional help. The new tax law threatens to make life harder for people on the receiving end of alimony payments, but that doesn’t mean you aren’t entitled to justice and a fair standard of living. If you have concerns regarding your alimony awards, or any questions about your divorce or how you will be affected by the new law, don’t hesitate to reach out to our highly experienced attorney Elizabeth Zwiebel and our competent and compassionate legal staff. We’re here for you and your case’s best possible outcome! Call The Zwiebel Law Firm at (205) 623-1001 or send us a message online!
The Zwiebel Law Firm, LLC
826 Columbiana Road
Birmingham, AL 35209
Phone: (205) 623-1001