Taxes and Alimony
The recently proposed tax reform bill being considered in the House of Representatives has a provision that may affect couples considering a divorce with an alimony award. The bill contains a proposal to eliminate the tax credit for those paying alimony and the tax hit for those who receiving alimony. This change could seriously impede settlement negotiations by removing this tax incentive for alimony payors. It is unclear whether this provision will survive any bill coming out of the House, or whether any tax reform bill will become law at all, but couples should be aware of these tax issues moving forward.