The deadline for filing 2019 federal and state income tax returns is right around the corner – July 15, 2020. If you were divorced in 2019, here are a few things to think about:
Filing Status – Your marital status as of December 31st controls whether you are considered married or single for purposes of filing your tax returns. Remember the Nisi period discussed in a prior post? Under Massachusetts law, a party is not considered divorced until the Nisi period expires. This means that even if the Judgment of Divorce is dated December 1, 2019, due to the Nisi period, you remained married for another 90 days. If you were still married as of December 31, 2019, you can file your 2019 tax returns as married filing jointly or married filing separately. There are risks and benefits to either filing option, so consult with your attorney. There is also an option to file as head of household where you are “considered unmarried” due to living apart from your spouse for six months or more during the tax year. To qualify as head of household, you must also have paid more than half the cost of maintaining your home for the year and have one or more dependents.
If your divorce was finalized and the Nisi period expired in 2019, then you can file as head of household if you had a dependent living with you more than 50% of the year and paid more than half the costs to maintain your household. If you do not qualify to file as head of household, you must file as single.
Be sure to check your Separation Agreement or Judgment of Divorce for any provisions relating to the filing status for 2019 income tax returns.
Alimony / Child Support – Child support paid under a Temporary Order or final Judgment of Divorce is not taxable or tax-deductible. Child support is not reported on an income tax return. Alimony paid under a Temporary Order or final Judgment of Divorce may be taxable or non-taxable depending on whether it began as an obligation prior to the Tax Cuts and Jobs Act. Alimony obligations that first began in 2019 are not taxable or deductible for federal tax purposes, but are taxable and deductible on a Massachusetts tax return, except if you and your spouse agreed otherwise. Check the terms of your Judgment or Separation Agreement relative to taxability of alimony paid or received to be sure you handle it correctly on your tax return.
Dependents – While the dependent exemption was eliminated for tax years 2018 through 2025, the child tax credit remains. A well-written Separation Agreement will contain provisions relating to who claims the children as dependents. If there is no mention, then the parent with whom the children lived 50% or more of the time during the tax year is entitled to claim the children as dependents and take the tax credit. Check your Judgment or Separation Agreement to confirm. The child tax credit is one of three available child-related tax credits, so be sure to consult with your accountant regarding whether you qualify for any other credits.
Until next time,
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