Learn about filing federal & NY state taxes when you are paying or receiving spousal maintenance. Get help from a family lawyer now.
Spousal maintenance guidelines can be tricky to understand regardless of whether you’re the payor or the recipient. This is especially true when it comes to figuring out if you should pay taxes on the money you receive from your ex-spouse or have alimony that you paid deducted before your taxes are taken out. Here’s what to know about taxes and spousal maintenance in New York and how to get help from a qualified family law attorney.
How Changes to Federal Law In 2017 Affect Spousal Maintenance Taxes
Prior to the Tax Cuts & Jobs Act of 2017, the recipient of alimony would count these payments as income and the payor would deduct the payment from their income when they filed their taxes. The law had been this way for about 75 years until the new legislation passed and became effective in 2019.
Now, spousal maintenance is neither tax-includable nor tax-deductible. Although this is set to expire in 2025 and the law will revert back to pre-Act guidelines, currently, this places a significant burden on payors who can no longer deduct the spousal support that they pay from their adjusted gross income.
Essentially, this legislation shifted the tax burden from the recipient of alimony to the payor, which many see as an unfair move considering the payor already suffers financially from the payments alone. Marriages that took place prior to December 31, 2018, were not affected by these changes, and the tax burden is still absorbed by the support recipient.
Recently, the Biden administration proposed a bill that would effectively hasten the return back to pre-Act guidelines, aiming for the changes to take effect before 2025. It’s unclear if this will ultimately be successful or not.
Are State Taxes Any Different?
Yes. New York state did not elect to change its tax laws when the federal government did, so you will file spousal maintenance that you pay or receive differently on your state taxes. In New York, alimony is still tax-deductible for the payor and tax-includable for the recipient. This can be confusing when you have to file one way on your federal taxes and another way on your state forms. It may be a good idea to work with a tax professional to get everything ironed out.
Get Help From an Experienced New York Divorce Lawyer Today
Navigating family legal issues can be difficult at best. Often, they turn nightmarish, especially if your spouse disagrees with things or refuses to move forward for the sake of making things harder for you. Anecdotally, the risk of this occurring is higher when a spouse is ordered to make support payments to the other. If your spouse ends up having to pay alimony, they may be more likely to drag their feet or contest every issue to lengthen the process, drain your wallet, and cause you emotional stress.
Experienced New York divorce attorney Heidi E. Opinsky can provide you with the comprehensive, compassionate divorce advocacy you need when family legal issues arise and threaten your well-being or the well-being of your children.
Call today to learn more about divorce, spousal maintenance, and more, or to book an initial consultation with Attorney Opinsky by dialing 203-653-3542.