Jason V. Owens reviews how alimony reform advocates keep pushing for changes in Massachusetts law that permits lifetime alimony to continue.
In June of 2016, alimony reform advocates in Massachusetts were riding high. Their bill, aimed at closing a loophole in the state’s alimony law that allowed so-called “lifetime alimony” to continue for some Massachusetts spouses, had just passed the Massachusetts House in a unanimous 156-0 vote. Support in the Senate seemed solid, and the bill was supposed to breeze into law. Then came the July legislative crunch, and before reform advocates could blink, the reform bill had been passed over by a state senate that was more interested in other issues.
Table of Contents for this Blog
- Another Try in 2017, but Same Result for Alimony Reform Advocates
- Could Elimination of Alimony Tax Deduction Spur Massachusetts Reform?
- 2018 is a New Year. Will the Result be Different for Alimony Reform?
- Handicapping Alimony Reform in 2018. Will it Happen?
Another Try in 2017, but Same Result for Alimony Reform Advocates
Reform advocates entered 2017 with a full head of steam, with a new bill receiving public support from the House and Senate candidates in the fall election cycle, followed by numerous co-sponsors signing on in the new year. Again, the bill seemed poised for passage as the summer legislative session heated up. The Boston Globe Magazine published a column supporting the bill. So did the Boston Globe.
And then it happened again. Just like the year before, the 2017 legislative session ended with alimony reform mired in the state senate. This time, the culprit was Sen. William Brownsberger (D), powerful chairman of the Joint Committee on the Judiciary, standing in the way of passage.
Could Elimination of Alimony Tax Deduction Spur Massachusetts Reform?
On its face, the language of Section 11051 suggests that divorcing spouses will have all of 2018 to enter divorce agreements that include tax deductible alimony. Indeed, it appears that all divorce and separation agreements entered before December 31, 2018 may include tax deductible alimony, and that alimony will continue to be tax deductible into the future for pre-2019 divorces. In essence, tax deductible alimony is “grandfathered in” for all Americans divorced before 2019. Individuals divorced in 2019 or later will be out of luck.
As noted in our blog on the tax bill, the alimony formula presently used under the Massachusetts alimony statute was premised on the belief that alimony payments would be tax deductible to payors:
The Massachusetts alimony statute “caps” alimony at 35% of the difference between the respective gross (pretax) incomes of the parties. The ARA, passed in 2011, based the 35% cap on the long-standing rule that alimony is tax deductible. Given that many alimony payers earn income in the highest tax brackets, the deductibility of alimony from the payer’s gross income often results in substantial tax savings that significantly “cushions the blow” for payers.
If the alimony deduction is eliminated under the new tax bill, will cause Massachusetts legislators to take another look at the law? If so, could this be the opening reform advocates need to close the lifetime alimony loophole?
Because the alimony deduction won’t be eliminated until 2019, it seems unlikely that the moribund Massachusetts legislature will spring into action to address the 35% cap anytime soon. Of course, with anti-Trump sentiment running strong on Beacon Hill, one can’t be sure what measures Baystate lawmakers could take in response to the Republican tax bill. At a minimum, the legislature seems likely to soften the blow of the new tax bill by making alimony tax deductible on Massachusetts state income taxes at some point in the next two years. To be clear, alimony is currently deductible for state income tax purposes only because the alimony deduction exists under federal law. The Massachusetts state income tax statute, M.G.L. c. 62, s. (d)(1), defines gross income and the vast majority of its tax deductions by simply incorporating the federal tax code, word for word, into Massachusetts law.
Obviously, any federal tax deduction is significantly more valuable than a state tax deduction, given that individuals pay substantially more in federal taxes than state taxes. Nevertheless, it would be a simple matter for Massachusetts lawmakers to make alimony tax deductible for Massachusetts state income tax purposes before the federal change takes affect in 2019. For alimony reform advocates, the question is whether changes to the ARA or state tax code could be a legislative vehicle for the changes sought by reformers.
2018 is a New Year. Will the Result be Different for Alimony Reform?
Due to the fact that the Joint Committee on the Judiciary has been concentrating on Criminal Law Reform, Alimony Reform has been put on a back burner. While it is understandable that they have their priorities, H 740 is a no-brainer.
The Senate Chairman, Senator Will Brownsberger has made it clear that the Committee will deal with H 740 after the Thanksgiving Holiday. The problem is that although he has expressed that H 740 does in fact return the ARA to it’s original intent, he is sympathetic to the arguments brought forth by the receiving ex-spouses. It is up to YOU to convince him of the importance of finality and the fact that a Judge can deviate for special situations.
Hitner also reported that the original Alimony Reform Task Force – whose recommendations form the backbone of the 2011 Alimony Reform Act – reconvened this fall to advocate for the new bill:
Rep. Claire Cronin (House Chair of the Judiciary), hosted a meeting back in September with the Alimony Reform Task Force Members to discuss the current status of H 740. At the meeting the Task Force Members and Rep Cronin discussed any possible issues and was educated by the Attorneys as to how well the ARA of 2011 was working and the need to pass H 740. Rep Cronin in in support of H 740.
Handicapping Alimony Reform in 2018. Will it Happen?
Persistence often pays off in Massachusetts politics. Rumor has it that advocates will focus all of their attention on Brownsberger’s committee in the new year, confident that the House will support a bill if it can only get past the Senate. In 2017, Brownsberger told supporters that the Committee’s focus was criminal justice reform. With that now out of the way, there seems little reason for Brownsberger to further delay a vote on alimony reform in the face of persistent supporters.
After two years of frustration, it is hardly certain that 2018 will see a new alimony bill in Massachusetts, but supporters have good reason to hope that this will finally be their year.
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About the Author: Jason V. Owens is a Massachusetts divorce lawyer and Massachusetts family law attorney for Lynch & Owens, located in Hingham, Massachusetts.