Spousal Support Under the New Tax Laws

Starting in January of 2019, the advantages presently held by the spouse paying spousal support will be lost, as will the disadvantages to the spouse receiving spousal support.

Here is what has been happening for decades:

The person paying spousal support gets to deduct the entire amount from their income. The person receiving spousal support has to pay income taxes on it and it is treated as income to them. This means that the spousal support paid is calculated as income to the person receiving it.

Here is what will be happening come January, 2019:

The person paying spousal support will no longer be able to deduct the spousal support payments from their income for tax purposes, meaning that they are paying after tax money as spousal support. As for the spouse receiving support, it is no longer received as income so the receiver of the spousal support does not have to pay income tax on that spousal support.

As to child support calculations after this change, the receiver of the spousal support will no longer have that entire amount received as their income. Whether this means the New York Courts will attribute the amount of spousal support paid as income to the one paying it, it seems the system has to do that.

Child Support Implications

In the past, spousal support amounts were immediately removed from the income of the payor, thus not considering it their income but that of the party receiving it for child support calculations. Come January, 2019? We can only guess what is going to happen, but my guess is that payors of spousal support will be paying child support based on their income inclusive of the spousal support amount.

This, as with most child support matters, will be grossly unfair as the payor if paying both spousal and child support as the child support calculation will take a percentage from monies he or she already gave away to his or her former spouse.

Surely this makes the portion of child support already paid that is far beyond the needs of the child, what many consider maintenance in disguise, even more grotesque and impossible to view as fair from any perspective.

The hope, of course, is that New York State Legislature and Courts recognize that the child support calculation cannot fairly include amounts already paid to the person already paying spousal support. Is that hope realistic? Certainly not for immediate changes, though I believe many Support Magistrates will make an effort to fix this gross injustice, their efforts may well be overturned.

In Conclusion

If separation or divorce are in your near future and you anticipate that you will be paying support to your spouse, you might want to seriously consider moving forward this year.

If you would like to discuss your separation or divorce matters, please feel free to contact Diana G. Cunningham at 315-565-2760, or  Contact.