The media has been buzzing with the recent legislative attempts to pass a sweeping tax plan. Now that it has passed, many people in New Hampshire and across the country are considering how the changes will impact them. It could have a significant impact on couples who are seeking divorce, as it changes how spousal support is taxed.
Spousal support is money paid by someone to a ex-spouse who earns less money. While there are many factors that go into calculations of such payments, those who pay spousal support receive a tax deduction on the amount paid. Instead, the person receiving the payment pays the tax. Because the receiver typically makes less money, he or she is often in a lower income bracket, making the amount of taxes paid less.
While it is important in keeping assets within the family, it also reduces the amount of taxes received by the federal government. In fact, approximately 600,000 people claimed a spousal support deduction in 2015. Because the tax reform passed, couples seeking a divorce starting in Jan. 2019 may face additional considerations regarding asset division.
Professionals with experience with divorce law indicate that the change could potentially lengthen divorce proceedings as couples may have more difficulty dividing assets. Additionally, discussions regarding prenuptial agreements must also take the change into consideration. Because laws can change, making it difficult for people with little legal experience to fully understand their implications, many who make the decision to seek a divorce in New Hampshire request advice from an experienced attorney as they take steps to begin the next step of their lives.
Source: lasvegasnow.com, "Alimony will now be taxed under GOP bill", Jackie Wattles, Dec. 15, 2017