The House of Representatives has revealed its Tax Reform Plan encapsulated in The Tax Cuts and Jobs Act (HR 1)

The House Committee on Ways and Means Section by Section Summary describes the provision on Alimony as follows:

Sec. 1309. Repeal of deduction for alimony payments.

Current law: Under current law, alimony payments generally are an above-the line deduction for the payor and included in the income of the payee. However, alimony payments are no deductible by the payor or includible in the income of the payee if designated as such by the divorce decree or separation agreement.

Provision: Under the provision, alimony payments would not be deductible by the payor or includible in the income of the payee. The provision would be effective for any divorce decree or separation agreement executed after 2017 and to any modification after 2017 of any such instrument executed before such date if expressly provided for by such modification.


  • The provision would eliminate what is effectively a “divorce subsidy” under current law, in that a divorced couple can often achieve a better tax result for payments between them than a married couple can.
  • The provision recognizes that the provision of spousal support as a consequence of a divorce or separation should have the same tax treatment as the provision of spousal support within the context of a married couple, as well as the provision of child support.

 JCT estimate: According to JCT, the provision would increase revenues by $8.3 billion over 2018-2027.


  1. The alimony deduction is not really a divorce subsidy. Rather, the deduction reflects that a portion of the payor spouse’s gross income has been shifted to the payee spouse. Absent a deduction the payor spouse will be required to pay tax on income he or she will not have available for his or her own support. To say that this situation is the same as the payment of spousal support during the marriage is inaccurate. During the marriage the spouses live under one roof. After the divorce the spouses must maintain two separate households.   The only present tax revenue impact of alimony payments is a rate arbitrage benefit if the payee spouse is in a lower tax bracket than the payor spouse.
  2. The Joint Committee on Taxation (JCT) estimate of tax savings from the Bill also seems questionable. Should this provision become law, alimony payments will simply be reduced to reflect the fact that the payor spouse is paying the income tax on the payee spouse’s alimony payments. Negotiations over support will become more complicated.

Copyright 2017 by Robert S. Steinberg, Esquire
All rights reserved


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