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Big Changes Regarding Spousal Support in Ohio

man and woman signing divorce papers
Ohioans who pay spousal support will see changes in their taxes in the coming years due to the new tax plan passed by congress and signed into law by President Donald Trump in December.

The sweeping tax overhauls include an elimination of a tax deduction for spousal support payments that has been part of federal tax code for 75 years. These new rules will not affect taxpayers who got divorced or signed a separation agreement before 2019. Beginning next year, however, people who pay spousal support will not be able to write off those payments as tax deductions. People who receive spousal support will not have to claim the support as income. This new tax law also may apply to spousal support orders modified after January 1, 2019.

Some experts fear the changes could make divorce negotiations more difficult and actually lead to less spousal support being paid, as more of the paying spouse’s money would be going toward taxes. However, proponents of removing the alimony deduction say it is done out of fairness to married couples who do not have access to the deduction.

What are the specific changes?

Under current tax rules, the spouse who pays spousal support can deduct those payments from his or her taxes, and the receiving spouse must pay income taxes on the money received. In addition to the elimination of the deduction for the paying spouse, the receiving spouse will no longer have to pay income taxes on spousal support payments received.

Critics of the new law say the current system is set up to allow both spouses to move on with their separate lives more affordably. The new system, they say, could create a greater imbalance between the paying and receiving spouses.

Proponents call the alimony deduction a “divorce subsidy,” arguing that divorced couples have an unfair advantage over married couples when it comes to taxes. They argue that spousal support should be treated like child support. Child support is not tax deductible for those paying it, and it is not classified as taxable income for the recipient.

For more information on how these federal changes to spousal support could affect you, contact a knowledgeable family law attorney with Fox & Associates Co., L.P.A.

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