How the New Tax Plan Effects Alimony (Part 3)

Should You Have Your Alimony Recalculated?

With the new tax law, the person paying alimony will not be allowed to deduct the payments after Dec. 31, 2018.  Likewise, the person receiving alimony will not have to claim the alimony payments as income.  This new tax law change could have huge effects on the payor and payee’s finances.  In South Carolina, alimony can be reviewed upon a showing of a substantial change of circumstances.  Under South Carolina law, the court is required to take into account the tax effect of alimony payments when determining alimony amounts. SECTION 20-3-130, S.C. Code of Laws.  Some judges also used software programs that took into account the tax effect on the parties when determining alimony.  So starting January 1, 2019, I think the court will have to consider the new tax law and review alimony payments being made or received.  This may mean an increase in alimony payments for some and a decrease for others.

So, the question is when should you talk to an attorney to see if you should have the court review your alimony situation?  I would not wait until January 1, 2019, to review your situation.  Call me sooner if you wait until January 1, 2019, to review your alimony situation and we decide you should go back to court, there will be a delay in getting in front of a judge.  Also, by reviewing your situation now, we may be able to work out a settlement with your ex-spouse so we don’t have to fight it out in court.  If you think the new tax law will affect your alimony payments or if you are not sure, call me and we can discuss it.