Updates to California Alimony Taxation Laws
Spousal maintenance is one of the four key elements of divorce. Other elements include division of marital estate, child custody, and child support. When you divorce your spouse, the court will have to determine the amount of money you will have to pay monthly to support your ex. If you earn less than your spouse, you may be the one to receive support from your spouse.
Family court expects both parties to continue living the quality of life they are used to. A judge can award spousal support if a spouse is mentally or physically incapable of getting any meaningful job. If a spouse quit their job or disrupted their studies to care for the family, the judge will consider this when determining spousal support issues.
It is important to note that judges are also required to consider the tax consequence of alimony for both parties when calculating spousal support. Since there have been updates to California alimony taxation laws, things will be different beginning Jan 1, 2019.
Changes in Alimony Taxation Laws
Congress amended alimony taxation laws and scrapped the deduction that alimony payors used to claim. The new law has also scrapped the income tax that alimony recipients used to pay. This means that from Jan 1, 2019, payors cannot claim a tax deduction for any alimony payments they make while recipients will not have to pay income tax on alimony payments they receive.
Since family courts are expected to consider the tax implications of alimony to both the payor and the recipient, family courts will have to award lower alimony payments to ensure that payors are not disadvantaged. The reduced spousal maintenance will take into consideration the tax that the payors will have to pay for the spousal maintenance payments they make.
If you are already paying alimony, you will have to go to court to seek an amendment or modification. You will have to hire the best family lawyer in Rancho Cucamonga to help you file a modification request. Judges are required by law to take all factors into consideration when making a ruling, including tax consequences.
Once the request has been made, family court judges are expected to modify the alimony payments appropriately, without any objections from the recipient, since they will ultimately remain with the same amount of money. After all, they will not be required to pay any income tax on the alimony.
When looking for a suitable lawyer to help you out, it is crucial you pay attention to their experience. You want to hire the most experienced family lawyer to ensure you will be effectively represented in family court.