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Import Wisconsin Divorce Law Changes: Impact of the 2017 Tax Cuts and Jobs Act on Family Law

The Tax Cuts and Jobs Act, passed in 2017, imposed extensive changes throughout the tax code. A few of those changes directly impact Wisconsin family law litigants and are important to keep in mind, particularly when going through a divorce.

The first, and arguably most drastic change which impacts family law, is the elimination of the deduction for maintenance payments. Maintenance, also commonly referred to as “alimony,” is a monetary payment from one former spouse to the other, for either a limited or indefinite period of time. Prior to the Tax Cuts and Jobs Act, a former spouse who paid maintenance to the other spouse was allowed to claim a tax deduction from his or her income. Similarly, the recipient spouse of the maintenance was required to report all maintenance payments as taxable income. Under the new law, for any divorce or separation decree executed after December 31, 2018, the payor spouse is not allowed to claim a deduction, and the recipient spouse is no longer required to claim the maintenance as taxable income. This is an important change because prior to the Tax Cuts and Jobs Act, many divorce litigants were incentivized to pay maintenance based on the knowledge that they would receive a tax deduction. This incentive no longer exists under the new law, which may make maintenance disputes more prevalent.

The second important change which impacts family law is the elimination of personal exemptions. Prior to the passage of the Tax Cuts and Jobs Act, taxpayers were allowed to claim a $4,050 deduction per qualifying taxpayer, spouse, or dependent. Under the new law, personal exemptions are suspended for the tax years of 2018-2025. Personal exemptions provided tax savings for all filers, but particularly for filers with dependent children. This is an important change for the divorce process because parents going through a divorce typically negotiated as to which parent would be allowed to claim the child(ren) for each tax year.

Although personal exemptions are eliminated under the Tax Cuts and Jobs Act, the child tax credit was doubled from $1,000 to $2,000 for the tax years of 2018-2025. The child tax credit is available for each qualifying child under the age of 17. Although this increase can impact divorcing parents, it does not hold the same negotiation importance during the divorce process as the personal exemption did because the child tax credit is generally only available to the parent who the child lives with for at least six months out of the year.

It is important for family law litigants to keep tax considerations in mind when going through a divorce. If you need help with a divorce, please contact Petit & Dommershausen today and speak to one of our experienced family law attorneys. With three convenient locations in Oshkosh, the Appleton area, and Green Bay, we serve all of northeast Wisconsin including Outagamie, Winnebago, Waupaca, Calumet, Brown, Oconto, Marinette, and Fond du Lac counties.

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Is CBD Oil Legal in Wisconsin?

               If you have driven through, or live in, any medium to large-size city in Wisconsin, chances are you have seen at least one “CBD Oil Sold Here!” banner hanging in a store window. The use of CBD oil has become increasingly trendy over the last year, and many users claim that it can help promote sounder sleep, reduce inflammation and pain, and help reduce stress and anxiety. But one thing many Wisconsin consumers wonder is whether it is in fact legal to possess and use CBD oil.

The most recent bill addressing the legality of CBD oil was passed by the Wisconsin State Legislature in 2017. The bill allowed for citizens to possess CBD oil if a doctor confirmed, in writing, that the product was being used to treat a medical condition. This law is embodied in Wis. Stat. § 961.32(2m)(b) and remains in effect to this day. What that means is that possession of CBD oil without a valid note from a doctor can technically be prosecuted as a misdemeanor criminal offense.

At this point, you may be wondering how none of your friends and family members have been charged with some sort of possession offense after leaving the CBD store on the corner with a bag full of CBD gummies, oils, or vapes without first obtaining a doctor’s note. You may also be wondering how that CBD store on the corner has been allowed to remain in business in the first place.

In 2018, the Wisconsin State Legislature passed a bill authorizing farmers throughout the state to grow industrial hemp. The hemp produced by farmers can be used to produce and sell CBD oil. Due to the conflict this created in the CBD law, the Wisconsin Attorney General’s office released a statement in May of 2018 advising law enforcement officials throughout the state to refrain from enforcing the requirement that consumers must possess a physician’s note in order to use CBD oil. In other words, while you are still technically required to have a physician’s note to use CBD oil, you will most likely not be charged with any criminal offense if you do not have one. If you’d like to play it safe, obtaining a doctor’s authorization is your best option!

While the use of CBD oil seems to be trending towards complete legalization, possession of marijuana remains illegal in the state of Wisconsin. If you or a loved one has been charged with a marijuana-related offense, call Petit & Dommershausen for legal assistance today at (920) 739-9900.