Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. It does not include voluntary payments that are not made under a divorce or separation instrument.
Payments are alimony if all of the following conditions are met:
- Payments are required by a divorce or separation instrument.
- Payer and recipient spouse do not file a joint return with each other.
- Spouses, legally separated under a decree of divorce or separate maintenance, are not members of the same household.
- Payment is in cash (including checks or money orders).
If the payment is not in cash, a non-cash property settlement, spouse’s part of community income, or to keep up the payer’s property, then the payment is not alimony
- Payment is not designated in the instrument as “not alimony”.
- Payments are not required after death of the recipient spouse.
- Payment is not treated as child support. Child care payments are not deductible or taxable
Tax Treatment of Alimony (see also tax reform)
Payments that qualify as alimony are generally deductible by the payor and included in the income of the payee in the year the payments are made. However, in order to prevent a “front-loading” of payments, Congress instituted a special alimony recapture rule if your alimony payments decrease or end during the first 3 calendar years.
You can deduct alimony you paid, whether or not you itemize deductions on your return. You must file Form 1040. You cannot use Form 1040A or Form 1040EZ.
Report alimony you received as income on Form 1040, line 11, or on Schedule NEC (Form 1040NR), line 12. You cannot use Form 1040A or Form 1040EZ.
If the payment are not alimony, then these payments are neither deductible by the payer not re-portable in income by the payor.
I created this blog to help understand certain basic aspects of U.S. tax law. Of course, each situation is unique and nothing that is on this site will ever replace the expert advice of a tax professional.
Please do not hesitate to contact me should you have any question