A recent national article on alimony (sometimes termed spousal maintenance or spousal support in Arkansas) notes that payers have been able to deduct payments made to their ex-spouses on their federal tax returns for the past 76 years.
That benefit won’t exist in year 77.
In fact, federal law providing for alimony deductions since 1942 was recently amended, being supplanted by a new provision that terminates the benefit on the last day of 2018. Starting next year, the impressive amount of tax savings long realized by payers — especially those in higher tax brackets — will simply cease to exist.
And, on the flip side, the requirement that recipients must report alimony as taxable income will also go away.
That tandem change certainly has implications for alimony negotiations in an Arkansas divorce both this year and beyond.
What are they, though? Do the impending changes that loom large render it preferable for a payer or recipient to finalize a divorce this year pursuant to current federal law? Or, conversely, might it be more advisable for a divorcing party to wait until next year and the application of the new rules?
The above-cited article clearly reflects that pundits’ views on the matter range widely, with arguments for divorcing parties on both sides of the alimony position — payers and recipients — stressing merits and drawbacks in given cases.
Alimony can be a complicated issue for divorcing parties at any time and absent new federal rules that reverse time-honored rights and duties and additionally inject a timing consideration into the process. Questions concerning post-divorce spousal maintenance can be directed to an experienced Little Rock family law attorney.