How Will the Federal Tax Changes Affect Spousal Maintenance in Colorado?

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New Federal Tax Changes Affect Spousal Maintenance

If you are receiving or paying spousal maintenance, if you are going through a divorce or considering divorce in the near future, the recent tax changes will likely affect you.

Commencing in 2019 and as a result of the 2017 federal tax legislation, spousal maintenance is not taxable as income to the recipient spouse and is not tax deductible as income to the payor spouse.

Prior to the passage of new federal tax legislation in late 2017, spousal maintenance was taxable as income to the recipient spouse and tax deductible by the payor spouse.

In 2014, the Colorado spousal maintenance statute enacted an advisory guideline amount taking into consideration the deductibility of the spousal maintenance amount paid by the payor spouse and the taxability of the spousal maintenance as income to the recipient spouse.

Colorado HB 1385 addresses and adjusts downward the advisory guideline calculation of the amount of spousal maintenance in circumstances where the maintenance awarded is not deductible as income by the payor spouse and is not taxable as income to the recipient spouse in light of the changes of the 2017 federal tax legislation.

HB 1385 also revises the definition of “gross income” and “adjusted gross income” to bring in line the tax implication of a spousal maintenance payment.

What if you are already paying or receiving spousal maintenance?

If you are currently paying or receiving spousal maintenance, the alimony orders do not have to change. The payor spouse will continue to receive tax deductions and the recipient spouse will continue paying income tax.

For more information regarding Colorado divorces in the Vail and Roaring Fork Valleys contact Vail attorney, Amy Goscha  and Aspen attorney, Ryan Kalamaya at 970-315-2365.

Kalamaya | Goscha is a Colorado law firm founded by Ryan Kalamaya and Amy Goscha. The boutique mountain law practice specializes in personal injury, criminal defense, DUI defense, divorce and family law. Kalamaya | Goscha has law offices in Aspen, Glenwood Springs and Edwards. To speak to an attorney call (970) 315-2365.

 

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