Before the January 1, 2019 changes to the tax treatment of spousal maintenance (alimony) nationwide, wealthy individuals had incentive to pay spousal support and maintenance. For around 70 years, paying spouses could deduct their alimony payments on their taxes, thereby relieving their tax obligation come tax day. But sweeping changes in the nation’s tax laws changed all of that and took away the tax advantages of paying alimony.
As of January 1, 2019, paying spouses can no longer deduct spousal support and maintenance on their taxes. This historical maneuver caused hundreds, if not thousands of high-net-worth individuals to rush to their divorce attorneys so they could expedite the signing of their divorce decrees before the December 31, 2018 deadline.
Moving in With Someone New
If you missed this deadline for any reason, you may be more eager to end your maintenance payments than some of your peers who were grandfathered in to the old tax law. You know that remarriage automatically terminates spousal maintenance payments, but what about cohabitation?
You can swear you heard somewhere that if your former spouse moves in with a new partner, it’s possible that the court will terminate their alimony payments, but is this fact or fiction? Read on as we set the record straight.
Suppose “John” and “Francesca” were married for 10 years and during this time, John financially supported Francesca while she took care of the couple’s home. Unfortunately, John’s frequent travel for his job took a toll on the marriage and one day, he came home and Francesca had packed her bags and moved out.
Since John earned a good living and Francesca hadn’t worked in a decade, the judge ordered him to pay maintenance for three years. But one day, a year after the divorce, Francesca got engaged to another millionaire and moved in with him. Is John still on the hook for maintenance until the wedding?
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In New York, if a receiving spouse moves in with a new romantic partner and lives with him or her full-time, it is possible that the spousal maintenance can be terminated, especially if the receiving spouse is now in a supportive relationship. If you would like to learn more about this, we invite you to contact our Dutchess County divorce firm.