How Trump Tax Law Effects Alimony in Family Law Cases
Beginning January 1, 2019, President Trump’s tax reform eliminated the tax deduction for alimony payments, and only divorce settlements reached before the last day of 2018 will allow a tax break for alimony payments according to the GOP tax reform bill passed in December 2017. This will result in larger alimony payments as the payments will require not only the alimony but also have tax consequences to the payer.
Given this new tax law, it will become increasingly important for divorce attorneys to retain Employability Experts to determine the ability of an unemployed or underemployed spouse to work, as well as to assess their earning capacity, in order to reduce the alimony awarded.
Employability Experts have extensive experience placing individuals in jobs given their age, education, past work experience, previously learned skills, and medical limitations if any. Matrimonial attorneys will retain such an expert to determine what jobs, if any, a spouse can perform and what these jobs pay in the local labor market. Some Employability Experts also document the availability of jobs the spouse can perform and the wages for these jobs in their local area. The salaries for the open jobs are also compared to average earnings reported by federal and state government wage surveys.
A recent Florida case illustrates the circumstances where an Employability Expert is required: Janice Doe, the female spouse, has a Bachelor’s Degree from a renowned university. She worked and was certified in the field of interior design, even winning an industry award. However, she stopped working to raise her family.
Ms. Doe was referred to an Employability Expert and a standard diagnostic interview was conducted detailing her education, past work experience, and training. At the time of the evaluation, she had not sought employment.
The Employability Expert was able to locate multiple open jobs in her geographical paying an average of $65,000 to $80,000 per annum which represented her current earning capacity.
OAS is a Nationwide Vocational Expert service with offices in NJ, NY, CT, PA, GA, FL, TX, NV and CA. To see how the OAS Vocational Experts can assist you in evaluating an underemployed, unemployed, or disabled spouse in a divorce case, consult www.oasinc.org or call 800-292-1919 for our professional qualifications, fee schedule, and a sample report.