What is the Change?
Commencing January 1, 2019, alimony in Florida is no longer subject to tax-deductibility.
What does this mean?
Previously, alimony had the benefit of being tax-deductible.
The party paying alimony would pay the amount of alimony ordered, in the complete amount ordered. At the end of the year when they filed their taxes, they were entitled to deduct the amount of alimony they paid on their taxes. This often had the impact of making the actual alimony paid much less since the deduction was received and the tax benefit would be felt with the tax filing.
Alternatively, the person receiving the alimony would be required to claim the alimony as income on their tax return and would ultimately pay taxes on the alimony as income.
The actual amount of alimony ordered is the actual amount of alimony paid. The person paying the alimony will no longer claim the deduction and the person receiving alimony will no longer claim the alimony as income.
The total “net effect” of the payments is now changed and you will no longer consider the taxable consequence of the alimony award.