When the Tax Cuts and Jobs Act of 2017 was signed, there were provisions that affect child support and, in particular, alimony payments for the 2018-2025 tax years. There are also several significant changes coming from the state of Georgia that will have a major impact on alimony and child support. Due to these changes, it’s important to consider finalizing your divorce before the end of 2018 if possible.
The new laws significantly affect alimony payments. If you are currently paying alimony, the changes will not affect you, even if here are modifications at a later date. However, if you reach an agreement after 2018, the way you are taxed on alimony payments will be far less friendly. Currently, the spouse paying alimony has an above-the-line tax deduction on their payments, and the spouse receiving the payments is requited to report those payments as taxable income. Child support is currently NOT considered taxable income, nor is it deductible by the person paying it.
Under the previous laws, alimony was less of a burden since it was 100% deductible. That was often a strong incentive to agree to payments instead of fighting them in court. While the payments were treated as taxed income for those receiving them, the majority of those spouses fell below the taxable income level, making it beneficial for both parties.
When 2019 rolls in, those payments will not longer be deductible for the spouse making the payments. That gives the spouse facing alimony payments more reason to fight payment, and could cause more protracted cases.
There were also major changes in the way child support is to be handled that went into effect July 1, 2018. Georgia Senate Bill 427 changed numerous facets of the child support guidelines.
Among the changes to child support cases-
- Separate worksheets for multiple children are no longer mandatory.
- The ability of a parent to pay child support will be a mandatory consideration in the final determination.
- Changes to how income is entered means a parent can no longer list minimum wage at a 40-hour workweek. The court will take into account specific account factors such as earnings history, education, criminal records, and more.
- Incarceration can no longer be considered “voluntary unemployment.” Incarceration stops the accrual of child support “for the amount attributable to lost income from the date of service of the other parent.”
- The court must take the subsistence needs of the parent, as well as the child, into consideration.
All of these changes drastically effect how divorces are handled. If you need help finalizing your divorce, we can help. Attorneys Trinity Hundredmark and Patrick McDonough at Andersen, Tate & Carr have combined experience of more than 30 years representing clients during cases involving divorce, child support, and alimony agreements in Georgia.
For more information, or to request a case evaluation, call our law office at (770) 822-0900.
We have been very successful at reaching the best possible outcome for our clients, and our attorneys are here to help you through this difficult and stressful time.
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