There are many changes imposed by the Tax Cuts and Jobs Act of 2017, signed by President Trump on December 22, 2017, affecting divorcing spouses. One of the most significant provisions deals with the income tax impact associated with making and receiving alimony payments.
The Act eliminates Sections 215 and 71 of the Internal Revenue Code, which allowed spousal support payments to be deductible by the payor and includable as income to the payee. As a consequence, the income tax treatment of alimony is completely overturned. The payor can no longer deduct the payment of alimony and the payee is no longer required to include the payment on each of his or her respective income tax returns. This change to the treatment of alimony, unlike many other tax provisions included in the Act, is permanent and does not sunset on January 1, 2026.