Tax legislation may leave Kentucky residents with alimony concern
Throughout married life, many Kentucky residents may rely on the income of one spouse in order to pay for household and personal needs. As a result, when couples decide to divorce, one person could potentially end up facing a more difficult financial future. However, this is typically where alimony or spousal support payments come in as one spouse may be required to make monthly payments to the other.
Typically, individuals who pay alimony have the ability to deduct that amount from their taxes while the receiving party must pay income tax on the support. However, recent tax legislation has many people wondering whether that arrangement will continue in the future. House Republicans are hoping to change alimony tax as part of their plan while Senate Republicans hope to leave the taxation as it currently stands.
If the changes take place, individuals who pay alimony would no longer have the ability to deduct their spousal support payments, and recipients would not longer have to pay taxes on the support. These changes could have a considerable impact on spousal support negotiations during divorce because many individuals may feel less inclined to make payments if they have to be made with after-tax dollars. As a result, many people are paying close attention as this legislation moves through Congress.
Individuals who already pay alimony and those who hope to obtain it during divorce negotiations may wonder what impact this possible change could have on their futures. Because of the potential impact, Kentucky residents may wish to discuss their concerns with their legal counsel. Knowledgeable professionals could help better explain what this legislation entails and how it could affect individual cases.
Source: CBS News, “GOP plan to cut alimony tax deduction has some divorcees on edge“, Nov. 16, 2017