How the New Tax Law Will Impact Spousal Support Calculations in New York in January 2019

Spousal Support CalculationsChanges go into effect on January 1, 2019, that will impact spousal support payments for people who divorce in 2019. The signing of the Tax Cuts and Jobs Act in December 2017 created changes that will impact couples who divorce after December 31, 2018.  The previous law made spousal support a tax deduction for the payor while it was taxable income for the payee. Beginning in January 2019, the payor will no longer be able to deduct these payments, and the recipient is no longer required to pay taxes on the income. 

This is a critical change that all couples who are considering divorce should take into account. Spousal support calculations in New York will change drastically in the new year. Here are some of the ramifications that may need to be weighed. 

Typically, the payor of spousal support does so because they have a larger income than the individual who receives the payments. If the payor no longer gets to deduct the spousal support payments before determining what their income tax due is, and instead, required to pay income taxes on the total; then there will be less money available to support the family while the government benefits from collecting more tax dollars. 

Under the old law, people who were paying spousal support frequently saved money on their taxes. This is because the amount that they paid in spousal support (maintenance) was deducted right off of the top of their taxable income.  Furthermore, because that they are taxed at a higher tax bracket, the tax dollars paid would have been more than, when reported as income by the recipient spouse (typically) taxed at a lower tax bracket, and thereby there was more money to share in the family. 

It may look as if the new tax law which goes into effect in January 2019 simply shifts the burden of paying taxes on spousal support payments from the payee to the payor, but the effects may be more far-reaching than that. The paying spouse is almost always subject to a higher tax rate than the receiving spouse.  Accordingly, after January 1, the payor will pay the taxes on the maintenance payments at their higher tax rate rather than the recipient paying the taxes at their lower rate. 
With the upcoming increasing tax burden on the payor (and hence, on the family), it seems logical that couples seeking a divorce may want to consider resolving their situation before December 31, 2018. 


Couples whose divorce proceedings are finalized in 2018 or who are already divorced will largely not be affected by the change. However, seeking any alteration to an existing spousal support agreement may result in being subject to the new 2019 tax law. 

Speak with a legal professional at the Sabra Law Group by calling 646-472-7971 today.





New York Prenup Attorney Discusses Temporary Spousal Support

Spousal maintenance (also commonly known as alimony or spousal support) is monetary support that is paid by one spouse to the other spouse during or after divorce.  It is possible for the court to order one spouse to pay the other spouse a specified sum for a certain period of time.  

Back in the day, it was common that the court would order the ex-husband to pay their ex-wife alimony in divorce cases, however, times have now changed and currently either spouse can be ordered by the court to pay support to the other person.

The thought process behind spousal maintenance is to obligate one spouse to pay the other spouse until that spouse is able to support themselves financially.  Usually, the support is temporary unless there are extenuating circumstances such as illness. 

The state of New York temporary spousal support statute has a 2-step formula that the courts apply during a contested divorce when the income of the spouses is disparate.  When the Court applies the formula, it may be determined that the higher earning spouse has to pay support to the lower income spouse during the pendency of the divorce.  In addition, the court may award legal fees to be paid by higher income spouse to the attorneys for the lower income spouse.  The intent of the temporary spousal support statute is to create an equal playing field for both spouses so that the lower income spouse will not have a reason to drag out the divorce. 

In a prenuptial agreement, both parties can, if they choose, agree to waive any claims of spousal support from each other.  They are also able to create their own formula for determining spousal support as long as they take the duration of the support and financial amount into consideration.

Contact a New York Prenup Attorney to Learn More About Temporary Spousal Support

Contact the Sabra Law Group today to learn more about spousal support and the formula used to calculate temporary spousal support at (646) 472-7971.