To amend the Internal Revenue Code of 1986 to make alimony deductible.
Impact
Should HB2634 be enacted, it would significantly alter the tax landscape for those involved in divorce proceedings. By allowing alimony to be deductible, the financial burden on those making alimony payments would be alleviated. Furthermore, reinstating this deduction could provide financial relief to individuals receiving alimony, enabling them to maintain a reasonable standard of living during what is often a challenging transition. This change would encourage fairer financial arrangements during separation and divorce settlements.
Summary
House Bill 2634 proposes an amendment to the Internal Revenue Code of 1986 to reinstate the deductibility of alimony payments for federal tax purposes. This legislative measure seeks to reverse previous tax reforms that eliminated the deduction, impacting individuals who pay or receive alimony following a divorce or separation. The bill underlines the financial implications for both payers and recipients, highlighting how the lack of a deduction can affect their overall tax burden and financial stability post-divorce.
Contention
The major points of contention surrounding HB2634 include debates over the fairness and economic implications of allowing such deductions. Proponents argue that reinstating the deduction is necessary to support individuals who are transitioning through difficult life changes, while critics may argue that tax benefits for high-earning payers could disproportionately advantage wealthier individuals. Additionally, the discussions could also revolve around the potential loss of tax revenue for the government, a concern for lawmakers who prioritize budgetary impacts.
To amend the Internal Revenue Code of 1986 to allow distributions from a health flexible spending arrangement or health reimbursement arrangement directly to a health savings account in connection with establishing coverage under a high deductible health plan.
To amend the Internal Revenue Code of 1986 to provide a tax credit for expenses for household and elder care services necessary for gainful employment.