Is my upkeep tax-free underneath the brand new tax regulation?

Note: The editors of Kiplinger’s Personal Finance magazine and Kiplinger Tax Letter answer questions about the new tax law from subscribers to our free daily Kiplinger Today email. Check out other readers’ questions and answers on the new tax law or ask your own question.

Question: I understand that the new tax law reverses the rules for alimony so that the payer can no longer deduct payments and the recipient no longer has to pay tax on alimony received. I got divorced in 2016. Does this mean that my child support payments are now tax-free?

Answers: no The new regulation only applies from 2019 and only for divorces completed or changed after 2018. In the case of divorce after December 31, 2018, alimony payments are no longer deductible and the recipient does not have to declare the amount as taxable income. The law specifically allows ex-spouses to amend a previous divorce agreement to adopt the new rule after it went into effect in 2019. Of course, both you and your ex-spouse would have to agree to such a change. If a divorce is not modified before 2019, the old rules apply: the payer can deduct payments and the recipient has to pay tax on them.

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