Effective January 1, 2026, California changed the state income tax treatment of spousal support for new divorce or separation instruments.
Before (California’s historic rule): Spousal support was generally deductible to the payor and taxable income to the recipient for California purposes.
Now (for instruments executed on or after January 1, 2026): Spousal support is generally not deductible to the payor and not taxable to the recipient for California purposes.
Why It Matters
Spousal support is routinely negotiated based on net, after-tax outcomes. A change in tax treatment can materially affect support economics and settlement structure, particularly in matters involving significant income and complex cash-flow planning.
Drafting and Modification Considerations
For older instruments, tax treatment may differ depending on the date of the underlying instrument and the language of any subsequent modifications. Orders and agreements should expressly and precisely address tax treatment. Consulting a knowledgeable California spousal support lawyer from Kramer & Zitser, LLP can help ensure agreements are properly drafted to reflect current California tax rules and avoid unintended financial consequences.
This publication is general information only and not legal or tax advice.
