The Tax Cut and Jobs Act (TCJA) impacts divorces occurring after Dec. 31, 2018, through the elimination of taxable/tax deductible alimony. The TCJA essentially nullifies the statutory factor of the consequences from the tax treatment of alimony, N.J.S.A. 2A:34-23, because all future alimony payments will be nontaxable.

Recipients of alimony may naively celebrate the change, believing that they will benefit from the new law because they will not be taxed on their alimony. However, the changes impacting alimony under the TCJA are not likely to increase the net support they will receive, as courts and practitioners will implement revised alimony calculations to account for the change in the tax laws. The bottom line is that alimony obligations will now be smaller than prior awards under the old tax law to avoid an unfair windfall to the recipient, and undue hardship to the payor.