2017 Republican Tax Bill Removes the Alimony Deduction

Beginning January 1, 2019, individuals paying alimony will no longer be able to deduct their payments for tax purposes, and supported spouses won’t have to include alimony in their gross income.

On Wednesday, December 20, 2017, Congress passed a 500-page tax reform bill that includes sweeping changes to both individual and business taxes. One of the new tax provisions will affect alimony agreements executed after December 31, 2018.

Under former Internal Revenue Code 26 U.S.C.A. Section 215, a spouse paying alimony (also called spousal support and separate maintenance) could deduct an amount equal to the alimony payments made during the taxable year, and the spouse receiving alimony had to include the payments in that year’s gross income.

Now, for any alimony agreements executed after December 31, 2018, spouses paying alimony will not be able to deduct these payments on their taxes, and the supported spouse will not have to report alimony as income. Divorcing couples will have to consider these new tax rules as they structure or amend alimony agreements.

Effective Date: January 1, 2019