Prior to the
Tax Cuts & Jobs Act of 2017 ("ACT"), a divorced spouse could deduct any alimony payments made to his former spouse. The former spouse had to claim the alimony received as income. The ACT eliminated this tax deduction effective January 1, 2019. The implementation of this change remained unclear for agreements executed prior to December 31, 2018, but modified after that date. On July 22, 2019, the IRS issued an article clarifying the treatment of
payments pursuant to a modified agreement. The article explained that "the new law applied to a modified agreement if the modified agreement 1) changed the terms of the alimony or separate maintenance payments and 2) stated that the alimony or separate payments are not deductible by the payer spouse or includable in the income of the receiving spouse." As a result, modified agreements that do not change or modify the terms of the payments and require them to be non-deductible remain subject to the old law.
