New Jersey family court judges often issue orders regarding financial payments meant to provide for financial assistance to former spouses. Many people in this state and others pay alimony in divorce. In the past, such payments could be claimed as deductions on federal tax forms but this will no longer be so for dovirces that occur after Dec. 31, 2018, once new laws take effect.
In 2019, new tax laws take effect that will have an impact on both sides of divorce. Those who pay alimony will no longer be able to claim it as a deduction. This might prompt people paying to fight for lower payments, since they’ll no longer be able to look forward to getting some of the money back in tax refunds.
On the other hand, those receiving alimony will no longer have to report it as income for tax purposes and will no doubt want the court to order the maximum amount possible to cover their financial needs. With one side fighting for higher payments and the other requesting reductions, it may lead to some acrimonious situations. The new tax laws may also affect existing prenuptial or postnuptial agreements, so those who have signed such contracts prior to Jan. 1, 2019 will want to have their documents closely reviewed to check if any items may be nullified when the new laws take effect.
New Jersey spouses are subject to the court’s discretion in all matters concerning means of financial support, paid from one spouse to the other. To avoid problems regarding alimony and new tax laws, spouses can meet with experienced family law attorneys before heading to court. An attorney can provide updated information, as well as help determine a best course of action, if a problem arises during or after divorce proceedings.