Serving Waukegan, Libertyville, Lake County, Gurnee & nearby areas of Illinois
Our family law clients need to be aware of a big change to the tax treatment of alimony payments. Among the many changes to the tax laws enacted at the end of 2017 is a dramatic adjustment to tax consequences for those paying or receiving alimony (or maintenance payments as they are known in Illinois law) beginning January 1, 2019. In the past and continuing for the rest of 2018, the person paying alimony was able to take a tax deduction and the person receiving the payments had to claim them as taxable income. For any divorce decrees or property settlement agreements entered by a court after December 31, 2018, the opposite will be true: the payor will no longer get a tax deduction and the recipient will no longer pay income tax on the payments received. This new law treats alimony payments the same way that child support payments are treated for tax purposes.
If you are concerned about the tax consequences of a pending divorce or from an existing divorce decree, feel free to contact us.