January 18, 2019
Principal Jeffrey N. Greenblatt was quoted in the November 2018 Family Law Update publication of The Daily Record on the impact of the new federal tax law on divorce.
Under the new law, when it comes to alimony orders after January 1, 2019, payers of alimony will not be able to deduct those payments on their federal tax returns, and people who receive alimony will no longer have to declare the payments as income. The result, said Greenblatt, has been a “rush to the courthouse” to ensure that alimony payments are contained in court orders signed before the end of 2018.
But, he added, right now it may be too late to get a case before a judge prior to the change in the law.
“The calendar is what the calendar is,” he said.
Greenblatt also said that beginning in 2019, spouses facing the prospect of paying alimony will fight hard to keep the payments low because they will not be deductible. In some cases, Greenblatt said, he has tried to secure a waiver of alimony for his client in exchange for a lump-sum settlement – but this will only be a solution in cases where there’s enough money available to pay a significant lump sum.
He also said that no one knows now how judges will respond to the new tax treatment of alimony: Will they award less alimony since the payer can no longer take a deduction? Only time will tell.