Feb 28, 2018 | Family Law

A previous post on this blog discussed how the recently enacted tax reform package will change the way alimony gets treated for federal income tax purposes. Specifically, alimony will no longer be tax deductible by the person paying it, and the person who receives the money will not have to report their alimony payments as income.

Some experts have recently suggested that this change may cause more contentious divorce and separation cases in Rockford and throughout the state of Illinois. The reason is that one important bargaining chip is that a person who is going to pay alimony will get the benefit of a tax deduction. With that bargaining chip off the table, more people may dig their heels in when it comes to alimony and force a court battle over that issue.

While this may seem like a minor problem, it is important to remember two things in terms of litigating family law issues. For one, a dispute over a single issue could easily spill over in to other areas, meaning that any hope of a settlement can be closed off. Moreover, as many experts acknowledge, litigating family law issues can lead to lasting psychological effects on a family, especially children.

On a related point, since Illinois’ current rules account for the fact that alimony is tax deductible, these rules may have to be changed once the new law goes in to effect.

Even under the current rules, though, alimony, also called spousal support, can be a hotly contested issue during a divorce or legal separation. In order to resolve such issues, it can take an experienced family law attorney to help a person navigate through the legal nuances of alimony law and help them evaluate their legal options. Moreover, the help of a family law attorney may be essential when negotiating or litigating an alimony payment.

Source: Chicago Tribune, “What could make divorces more contentious? The new tax law“, Ally Marotti, Feb. 22, 2018