In addition to impacting IRAs, the Tax Cuts and Jobs Act (TCJA) of 2017 (TCJA) also impacts alimony payments from solo 401k plans. Prior to 2019, the alimony payer (i.e. the solo 401k participant) received an above-the-line deduction and the recipient treated the alimony as income. Now any divorce agreements adopted on or after January 2019 no deduction for alimony payments are allowed, and alimony payments are not treated as income.
This essentially means that the rules are now more favorable to the payee but results in higher tax liability to the payer (i.e., the solo 401k participant). What is more, alimony payments no longer can be treated as earned income for the receiving spouse so the funds can no longer be used for IRA contributions purposes effective January 1, 2019.