In December 2017, Congress passed the Tax Cuts and Jobs Act, which made the most significant changes to the federal tax code in the last three decades. Since the tax reform law was passed, the news has been filled with discussion of its impact on people in the United States.

While many reports have focused factors such as corporate tax rates, one less-discussed update to the law will have a major impact on divorcing couples, changing the way taxes apply to spousal maintenance (also known as alimony or spousal support).

How is Spousal Maintenance Taxed?

When married couples decide to divorce in Wisconsin, a variety of legal requirements must be met to finalize the dissolution of marriage. While many of the outstanding issues that must be resolved can be settled in court through litigation, spouses are more often able to reach an agreement through negotiation or mediation.

As spouses work to negotiate a settlement in their divorce, they must be sure they understand and address the following issues:

1. Division of assets and debts - Wisconsin is a community property state, which means that the property a couple owns and the debts they are responsible for will be divided equally between the spouses during divorce. However, this division can become complicated, especially when considering factors such as the value of different types of property (including real estate, investment and retirement accounts, and closely held businesses), the tax consequences of property division, the spouses’ earning ability, and the value of assets that are not considered communal property. Spouses should take steps to fully understand the implications of the decisions made regarding the division of property, thus making sure that they will have the financial resources needed following divorce.

Whether married, unmarried, or divorced, parents are legally obligated to provide financial support for their children. Parents must ensure that their children have the resources needed on a day-to-day basis, including food, shelter, clothing, and other basic requirements.

Child support is based on the income that a parent earns, and it is typically paid by a non-custodial parent to a custodial parent. When parents experience an increase or decrease in the amount of income they earn, they should be sure to understand how these changes will affect their child support obligations.

Wisconsin Child Support Calculations

All children have the right to receive support from both of their parents. When a child is born to unmarried parents, however, it is thus necessary to legally establish the child’s paternity. Doing so allows a child’s custodial parent to receive financial support from the other parent and provides both parents with rights to share in custody and visitation of their children. Moreover, the establishment of paternity gives children rights to inherit their parent’s assets, to access family health history, and to receive insurance or Social Security benefits.

In many cases, establishing paternity is a straightforward process. However, when one or both parents are under the age of 18, complications can arise.

Establishing Paternity for Minor Parents

People get divorced every day. Yet despite the practice being common in the United States, many people are unfamiliar with the steps that must be followed and the legal obligations that must be met.

If you are considering divorce , the first step you will need to take is to file a petition for divorce. If your spouse has filed a petition for divorce, you will need to file a response. Consider the following procedures for completing these initial steps of the divorce process in Wisconsin.

File a Petition for Divorce