“Under the new tax law, Alimony, since Jan 1, is not a deductable expense!”
Doesn’t the recipient have to declare it as income?
I’m confused.
.
Before it was taxable to the recipient and deductible to the pay or. Now it’s not deductible to the payor, but tax free to the recipient. The Republicans has to cobble together ever little piece they could to make the effect “revenue neutral” so as to pass it through reconciliation. By shifting the tax on the money from the person in the lower bracket to the higher, there’s more tax on the same money. I envision judges adjusting the amount they would otherwise order to account for this.
It is not deductible and is not included in income. Only new agreements fall under the law. Old ones are grandfathered.
“Doesn’t the recipient have to declare it as income?”
According to my newly divorced buddy whom is also on the receiving end of alimony from his ex wife, yes it is taxable.