How will Spousal Support Change Under the New Tax Law

Pierre Domercq Divorce

The tax recent tax reform signed into law late last year produced significant changes which will impact many divorce cases in North County. The new law changed the nature of income and how deductions and tax credits will be handled in a divorce case, especially as it relates to spousal support.
Most North County parents will be able to deduct $2,000 in child tax credits for 2018 and subsequent years. The new tax law provides special accounts to provide tax advantages for tuition at religious and private K – 12 schools and for expenses which children are home schooled.
However, on January 1 of 2019 a change to spousal support will have a substantial impact on Oceanside, Vista, Encinitas and Carlsbad divorce cases. In the past, the party who paid spousal support was able to take a tax deduction for the amount of those payments each year. Spousal support was taxable to the recipient.
Starting in 2019, new spousal support orders issued by the Courts will no longer be tax deductable for the payor or taxible to the recipient. Existing spousal support orders will not be affected by the new laws. The taxation of child support and spousal support payments on both sides of the equation had a substantial impact on divorce cases in North County. It will be interesting to see how the new law changes those dynamics and how resolutions are reached going forward.
This is why it will be important to be represented by the experienced negotiation and trial attorneys at Burke & Domercq. Our partners have each represented clients in North County divorce cases for multiple decades. We invite you to review the recommendations of our clients and contact Burke & Domercq or call 760-712-3741 to schedule an appointment with one of our attorneys.
Learn how our experience, legal skill and expertise can help to reduce the stress and emotional toll of your divorce while ensuring you achieve the best possible outcome in your case.