The GOP tax plan has been passed by Congress and presented to the President for signature. Certainly, if the tax bill becomes law, the impact will be felt by nearly all Americans.  One change impacting divorcing couples is the elimination of the 75-year old provision allowing for the deduction of spousal support (alimony).

Currently, spousal support is deductible to the payor spouse and is included as income to the recipient spouse (payee). Under the GOP tax plan, spousal support will no longer deductible by the payor spouse. Further, the payments will not be included in the payee spouse’s gross income; rather, the money used for spousal support will be taxed at the payor spouse’s tax rates.

If this plan becomes law, the provision eliminating the deduction for spousal support payments will be effective for divorce and separation agreements signed after Dec. 31, 2018.