Dissolving a marriage in Pennsylvania is not a simple process. However, it can be even more harrowing from a financial standpoint for the spouse who decided to stay home with the children and thus does not generate any income. This is true whether the couple decide to go through divorce mediation or go to trial to tackle their financial issues. Fortunately, alimony may help the non-earning parent financially after the marital breakup. Unfortunately, the future disappearance of the alimony deduction may cause more financial issues for both spouses, which is why it has sparked criticism.

For over 75 years, it has been possible to deduct alimony payments from the paying spouse’s income. At the same time, these payments have been treated as taxable income to the spouse receiving them. However, for tax years after 2018, this deduction will no longer exist.

Critics claim that this will hurt the paying spouse, who understandably faces financial burdens following divorce. However, it also hurts the recipient spouse, as he or she will essentially lose one of the biggest bargaining tools currently available to financially weaker spouses during divorce proceedings. Still, the hope is that the change in the law will generate billions of dollars of tax revenue over a 10-year period, though it remains to be seen if that occurs.

Divorce is typically complicated due to the many issues that must be tackled during divorce mediation or at trial, ranging from alimony to property division. However, further complicating family law proceedings is the fact that the law is constantly changing, and certain changes may directly impact the outcomes of these proceedings. An attorney in Pennsylvania can provide the guidance needed to make sure that the client’s rights and best interests are protected at all times during a divorce proceeding, taking into consideration what federal and state laws dictate.

Source: dmagazine.com, “Divorce Just Got More Complicated“, March 30, 2018