For tax year 2023, are alimony payments made under a divorce agreement executed before 2019 deductible by the payer?

For tax year 2023, alimony payments made under a divorce agreement executed before 2019 are fully deductible by the payer. This is because the Tax Cuts and Jobs Act (TCJA), which went into effect in 2019, changed the tax treatment of alimony. For divorce agreements executed after December 31, 2018, alimony payments are no longer deductible for the payer nor considered taxable income for the recipient. However, agreements that were finalized before this date follow the old rule, which allows the payer to deduct the alimony payments when filing their taxes.

This deduction provides a significant tax benefit, reflecting the intent of the law prior to the TCJA, which allowed the payer to reduce their taxable income by the amount paid in alimony. Therefore, if the divorce or separation agreement was executed before 2019, the payer can still claim this deduction for payments made in 2023.