Divorce, alimony, child support tax rules have changed

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Thinking about splitting with your spouse? The 2017 tax overhaul has made things more complicated.

For recently divorced Americans, alimony payments are no longer tax-deductible for the payer, and they aren’t considered taxable income for the person receiving them, ending a decades-long practice. The changes affect divorce agreements signed after Dec. 31, 2018. 

Divorce, “can have a pretty meaningful effect on the outcome for individuals’ incomes,” says Katie Prentke English, co-founder of Harness Wealth, a New York-based wealth manager provider.

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Thinking about splitting with your spouse? The 2017 tax overhaul has made things more complicated.

The tax changes benefit people receiving alimony in most cases, according to tax professionals, because they are no longer required to claim alimony as income and won’t pay tax on it. 

It could also affect social programs that alimony recipients qualify for since their income will appear lower than it actually is. If they’re not required to report alimony income for health care, their income will be lower and they could potentially get a better subsidy, experts say.

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