A new tax rule has divorcing couples scrambling to sign on the dotted line before the end of the year. Come 2019 alimony will no longer be deductible.
Attorney Jonathan Lusk said every year, he sees families trying to hold things together through the holidays. But this year is different because of the tax reform signed by President Trump.
In 2019 the spouse ordered to pay alimony will no longer be able to get a tax deduction on the payments. Lusk said that's why some parties are trying to get to the courthouse this week.
'What he's trying to do, is he's trying to get to court as fast as possible, get a separation agreement signed and get a judge to rubber stamp that divorce judgment as soon as possible but most importantly in 2018 so he can deduct his alimony payments."
Lusk said the person getting alimony will benefit from the new rule because it won't be considered taxable income which is why they're drawing it out. Lusk said the government expects to get $7 billion from the rule change.
"The winner...The ultimate winner is the tax man because what was happening is obviously if someone is not audited people get away with tax fraud all the time."
The new tax law will go into effect on January 1, 2019.
The alimony rule had been in place for 70-years. Anyone who makes changes to their divorce settlement in 2019 could be subject to the new rules.