Are there tax consequences regarding the payment or receipt of alimony/spousal maintenance or child support?

Regarding alimony and child support, the correct understanding is that there are tax consequences, particularly for alimony. Under the Tax Cuts and Jobs Act, for divorce agreements executed after December 31, 2018, alimony payments are no longer considered taxable income for the recipient, and they are not deductible by the payer. Child support, on the other hand, has never been treated as taxable income to the recipient nor deductible by the payer.

Given this context, option B, which states that there are no tax consequences, does not accurately reflect the tax treatment of alimony. While it is correct that child support does not have tax consequences, it does not account for the treatment of alimony. Therefore, while child support is not considered taxable income, the treatment of alimony adds complexity to the tax implications surrounding these financial support obligations. The accurate understanding is that alimony does have tax implications, whereas child support does not, illustrating the nuances in tax law regarding these payments.