Monday, February 4, 2019

Divorce Settlements after the TCJA


The Tax Cut and Jobs Act (“TCJA”) of 2017 has had a significant impact on divorce and divorce settlements.  The TCJA eliminated the deduction for alimony payments and made this income non-taxable.  This change is permanent and does not revert back in 2026 like many other provisions in the TCJA.  

If you have a prenuptial or postnuptial agreement, it is advisable to have it reviewed by a qualified professional to determine if an adjustment should be made.  Trusts can also be utilized to avoid the impact of the loss of the alimony deduction.  These changes generally apply to divorces executed after December 31, 2018.  If you are interested in revisiting your prior documents or may be in the process of a divorce, contact the experienced attorneys of Morris Law Group for a consultation on how the TCJA may impact you.