New Jersey has welcomed a new year, and for many residents, 2019 was full of big changes. In addition to holiday celebrations and annual festivities, ’tis the season to start thinking about tax returns. Several new laws have taken effect, and one of them directly correlates to alimony payments.
Alimony is a provision paid by one spouse to the other after a divorce. The amount and duration of these payments can vary on a case-by-case basis. Previous tax law allowed a person paying alimony to count the payments as a deduction, and the person receiving the payments to count them as income. For divorces and separations that were finalized prior to 2019, the old law is still applicable.
For divorces that were not finalized in 2019 and going forward, the old rules cannot be applied. This change was part of a package of new laws passed several years ago called the Tax Cuts and Jobs act. While many of the new laws were enforced last tax season, the alimony law did not go into effect until this year.
A New Jersey resident who is preparing for divorce has much to consider. Everything from taxes to emotional health can be a concern. When a person has a question about alimony, child support or other divorce related financial matters, an attorney may be able to provide sound guidance and advice. Divorce, by nature, is a legal matter, and an attorney is happy to assist a client navigate the legal process and begin a fresh new year full of happiness and new possibilities.