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Alimony Tax Deduction Repeal Delayed

As part of the U.S. Congress’ drive to reform the tax system, one issue that kept on arising was whether the alimony tax deduction would be repealed.  The House of Representatives passed a version of the tax bill that included a repeal for divorces finalized after December 31, 2017, while the Senate version of the bill included no alimony tax deduction repeal.

In conference, both houses agreed on a final bill that includes the repeal.  However, it will only take effect for divorces that occur after December 31, 2018.

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Dependents and Qualifying Child for Child Tax Credit

The following excerpt from the Instructions for IRS Form 1040 provides information on whether a non-custodial parent (a parent with whom a child resides less than half of the year) qualifies for the Child Tax Credit (after the jump):

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Alimony Tax Tips

Robert D. Flach of MainStreet.com provides the following advice regarding tax treatment of alimony:

To be deductible, alimony payments must be in cash (or check) and required as a condition of the divorce decree. You and your “ex” must not live together in the same household, and payments must end upon the death of the “ex.”

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