Now that tax season is upon us, recent changes in the tax code have created urgent needs for some family situations. The Tax Cuts and Jobs Act signed into law in December 2017 is the largest overhaul of the US Tax Code in 30 years. One provision of this law in particular impacts New York State Spousal Maintenance Agreements. Since the law was enacted, the State of New York has not amended state guidelines for these maintenance agreements, creating a conundrum for Family Law attorneys and courts.
The experienced team at Williamson, Clune & Stevens, divorce lawyers in Ithaca, Elmira, Binghamton and Syracuse, can help you deal with the ramifications of this new law if you are considering divorce proceedings.
An Explanation of the Law’s Effect
For over 75 years, the alimony deduction has been a component of federal tax law that applied to maintenance agreements. To be specific, the new law does not apply to separation agreements of divorces that contain maintenance agreements from before December 31, 2018. However, for those seeking to enter into a spousal maintenance agreement following that date, spousal maintenance is no longer deductible on federal income taxes.
However, state income taxes in New York still provide the alimony deduction. All this adds up to an inequity for those in a higher tax bracket who may must pay maintenance, but can no longer depend on the federal tax deduction. This means less money is available to pay for maintenance allocations. And, since New York’s maintenance guidelines have not been changed to account for the federal elimination of a maintenance deduction, spousal support attorneys are challenged with how to make maintenance agreements more equitable.
How a Spousal Support Attorney Can Help You
Obviously, this dilemma creates the potential for conflict between parties over proposed adjustments to the maintenance agreement. The Payor will likely contend that some downward adjustment is warranted to balance the removal of the income tax deduction. The Payee is just as likely to oppose any reduction in the amount of support to be paid. A spousal support attorney from Williamson, Clune & Stevens can represent your interests on either side.
Some New York attorneys and courts have proposed making certain adjustments, or deviations, from the spousal maintenance guidelines to allow greater flexibility in statutory deviation factors that govern these agreements. Other solutions have been proposed when both parties cannot agree between themselves on an equitable solution.
Williamson, Clune & Stevens, divorce lawyers in Ithaca, Elmira, Binghamton and Syracuse, can provide counsel and legal representation for both negotiations and litigation when payors or payees need sound, experienced legal help. New cases of legal separation or divorce will be forced to contend with this inequitable situation in their maintenance support negotiations until a more permanent and fair solution can be reached by the legislature or the courts.
If you have questions about an existing New York spousal maintenance agreement, or you need counsel or representation for a new divorce and maintenance negotiation, the professional team at Williamson, Clune & Stevens can help. Call our Ithaca, NY office at 888-863-3341 or 607-273-3339 to schedule a confidential consultation with a member of our legal team.