Feds Gut Alimony Deduction but State of California Still Allows

With respect to payments required under divorce or separation instruments that is executed after Dec. 31, 2018, the Tax Cut and Jobs Act (TCJA) eliminates the deduction for alimony payments and recipients of affected alimony payments will no longer have to include them in taxable income. These changes solely apply to federal tax returns.

California law does not conform to changes made by the TCJA regarding alimony and separate maintenance payments made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (If the modification expressly provides that the amendments apply). Thus, deduction for alimony payments are still deductible and recipients of alimony payments are still required to include them in taxable income under California law.

If you or your business have legal questions or concerns regarding your state or federal tax filings, the professionals at Wilson Tax Law Group are available to assist and can be reached at 949-397-2292. Wilson Tax Law has offices in Newport Beach and Yorba Linda, California and assists clients worldwide.