On the first day of the year, tax reforms changed how Massachusetts handles divorce and alimony. January 1, 2019 marked the first day that alimony no longer qualifies for a federal tax deduction. Couples who have finalized their divorce agreement before December 31, 2018 will still be able to make an alimony deduction. However, Massachusetts law has complicated this deadline.
In the past, couples could only file for divorce if one or both spouses could be assigned fault for the marriage’s end. Activities that traditionally allowed for divorce included adultery, abuse, and criminal activity. With the arrival of no-fault divorce, spouses are no longer required to take or assign blame to get a divorce. No-fault divorces are now the most common way to end a marriage.
No-fault divorce laws spread across the nation in the 1970s. When it was Massachusetts’ time to pass no-fault divorce laws, the Catholic church had significant sway over the state’s lawmakers. This influence led to what is called the "nisi rule." The nisi rule gives couples 90 days to reconcile their marriage after a fault divorce is filed and 120 days after a no-fault divorce if filed. The purpose of the rule was to ensure couples who filed for divorce had a window to undo the process if they reconciled.
For decades, the nisi rule has been a quirk in Massachusetts divorce law that has been nothing but an inconvenience for couples looking to separate quickly. Now, tax reform has made divorcing couples unable to deduct alimony payments from their federal taxes.
Alimony can be costly for divorcees. However, alimony payers have been able to deduct their payments from their federal taxes and experience some financial relief. While the federal deadline to file a divorce and still be able to deduct alimony was December 31, 2018, the nisi rule has complicated things for people who have recently filed for divorce.
Those who filed a divorce had to do so by October 2, 2018, and those who filed a joint petition for divorce had to file by August 31, 2018 if they wished to deduct alimony from their taxes. Because of the nisi rules, alimony payers may be surprised when they find out that their tax deductions for alimony are not valid—a mistake that could lead to confusion with the IRS in the future!