Tax Consequences of Alimony

What are the tax consequences of paying or receiving alimony?

If you are paying alimony, then those payments can be tax deductible, so long as certain conditions are met in accordance with the Internal Revenue Code. If you are receiving alimony, then you must report the full amount of alimony as income on your tax returns. Failing to report alimony by the recipient is likely to result in an IRS audit.

Requirements for support payments to qualify as Alimony

To qualify as alimony under the Internal Revenue Code, the following conditions must be satisfied:

• The payments must be in “cash” (including check);
• The alimony must be paid and received under a divorce or separation instrument;
• The divorce or separation instrument does not say that the payments are not for alimony;
• The spouses must reside in separate households;
• There must be no liability to make payments following the death of the payee; and
• The payments are not treated as child support or property settlement.

If you do not meet these guidelines, then the IRS considers your payments to be child support or simply part of the divorce settlement, neither of which is tax deductible.

Is Child Support Deductible?

Child support payments or property settlements (i.e., payments that do not qualify as alimony) are always non-deductible to the person paying, and non-taxable to the person receiving the payments. However, alimony is different, and both the payor and the recipient need to abide by the tax regulations that govern all alimony payments.

Attorney Dana Whitten represents spousal support clients in courts in most Maryland counties, including Montgomery County, where our Rockville office is conveniently located near the courthouse. We invite you to contact us at (301)762-2528 or using our online contact form to schedule a consultation. We look forward to working with you on your case.

Frequently Asked Questions about Alimony