Into the Sunset: Divorcing Families Need Their Slice of the TCJA Reversions

On its path to sufficiently offsetting its major cut to the corporate income tax rate in 2017, Congress turned to a surprising source for funds: the alimony support payments of recently divorced families. Alimony’s inclusion/deduction regime in §§ 71 and 215 of the Code allowed divorcing couples to reach mutually beneficial divorce agreements for over half a century until it was unceremoniously repealed by the Tax Cuts and Jobs Act of 2017 with a striking lack of satisfying legislative justifications. This Note suggests that in evaluating the impact of the repeal, Congress and others have failed to consider an important piece in the puzzle: the marriage bonus. The marriage bonus, which rewards some couples with better results for filing jointly rather than separately, scaled proportionally with the pre- TCJA alimony subsidy and resulted in most couples receiving inferior tax treatment by choosing to divorce. Now, after the repeal of the subsidy, couples have an even worse result when they choose to separate. In the wake of the repeal of the alimony subsidy, some have praised the change’s improvements to the simplicity and consistency of the law, while others have mourned the loss of an important tax break that divorcing couples of the past leveraged to ease their transition out of the marriage bonus and into two separate and more expensive households. This Note analyzes both perspectives and suggests that the §§ 71 and 215 regime be reimplemented as part of the TCJA’s 2025 reversions with some minor improvements, including a compliance mechanism and a streamlined alimony calculation procedure. This restoration and improvement will return a much-needed benefit to recently divorced couples as they start their new lives.