Are Alimony Changes coming in Illinois?

The House and Senate’s tax bill is now in reconciliation. The two versions have been passed with such speed and so little explanation and oversight that many Family Law practitioners are not aware that the House version contains a provision which would make alimony payments NON-DEDUCTIBLE for Judgments entered after December 31, 2107. While the Senate version preserves this deduction, we must keep a close eye on the process to determine the final resolution of this significant provision.
Alimony payments required by an existing judgments entered (on or before December 31, 2017) would still be deductible by the payor and includible by the recipient. Also, if you have a prior judgment requiring such payments and the judgment is modified after December 31, 2017, your payments are still deductible as long as the modification does not “expressly provide that the amendments made by [the new tax bill] apply to the modification. My reading of this last provision is that if your modification is silent on the tax deductibility of the payments, they are still deductible. However, to be safe I would suggest that you still expressly put in any modifications that the payments are deductible by the payor and includible by the recipient.
A matter of significant concern is that In Illinois our Maintenance (Alimony) statute (in most cases) provides a formula for the calculation of alimony paid by one spouse to another. The Illinois statute itself does not make any reference of whether the payments are deductible from income by the payor or includible in income by the recipient. As such, if a Court was to merely apply the statutory formula and order alimony to be paid, the Payor would end up paying significantly more that the Illinois statute contemplated. Fortunately, the Illinois statute does allow a Judge to deviate from the formula and make an award of alimony which the Judge deems reasonable.
I would suggest that all Family Law practitioners read section 1309 of 115th Congress Bill H.R.1. This provision can have a devastating and unintended effect on those parties required to pay maintenance (alimony) under a decree of divorce or legal separation.