It has now been just over one year since the federal tax deduction was eliminated for spousal maintenance. In the past year, matrimonial attorneys and judges have grappled with how best to deal with this issue since New York’s maintenance guidelines remain unchanged.

By way of background, the Trump tax reform legislation (officially known as the Tax Cuts and Jobs Act), eliminated the “alimony” deduction that had been a component of federal tax law for more than 75 years. The new law does not apply to maintenance provisions found in Separation Agreements or Judgments of Divorce entered into before Dec. 31, 2018. However, if neither an Agreement nor Judgment of Divorce was in place by Dec. 31, 2018, spousal maintenance is no longer deductible on the payor’s federal income tax return. Conversely, the recipient receives the maintenance tax free. While the federal alimony deduction was eliminated, the deduction remains intact for purposes of New York state and New York City income taxes as New York opted out of the federal tax scheme and continued the alimony deduction at the state level.

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