The 2017 Tax Reform Bill has passed both houses of Congress.
How will this affect those of us who currently pay Maintenance/Alimony in Illinois?
While both houses of Congress passed their respective bills, both houses now need to work out the substantial differences between the two. If you want to take the time to read the latest passed version head over to https://www.congress.gov/bill/115th-congress/senate-bill/18/all-info.
- As it is now, Maintenance paid now to a former spouse is taxable for the recipient. So that both parties are not taxed on the same income, the one who makes the payments is allow to deduct the amount paid.
- The new tax law potentially could eliminate this deduction and have a significant impact on taxpayers who pay their former spouse.
- It appears that the new tax law creates a “divorce tax”. Depending on your income, you could be “pushed” into a higher tax bracket.
- Since there will be less money (and more paid to Uncle Sam), its possible the amount and duration of maintenance will have to be reconsider.
We wont know what the final version will bring until we see it. What used to be a more equitable system seems to have be pushed aside for political progress.