Either receiving or paying alimony can be a very complex when it comes to how it relates to taxes. It is important to make sure you know what is tax deductible and what you are likely to owe. If you are receiving alimony, this should be taxed as alimony. Similarly, if you are paying alimony, you should deduct this from your income tax since your former spouse will be paying the tax owed on receipt of the alimony.
This blog will provide a brief overview into how taxes work when it comes to alimony, whether you are paying or receiving.
Deducting alimony from your taxes
If your alimony payment is not counted as child support and you do not file a tax return together with your former spouse, it is likely that the alimony that you pay will be tax deductible. In addition to this, you should not be living in the same household as your former spouse.
Is the child support that I pay also tax deductible?
Child support payments are never eligible for being deducted from tax returns. Child support also always takes precedence over alimony. Therefore, if you underpay either alimony or child support, the money will always be allocated to child support before alimony.
How is alimony reported in my tax return?
It is important that you report your alimony payments correctly on your tax return, because if you fail to do so, you may be subject to a $50 fine. You should report the full amount as income if you are receiving alimony. You should also include your former spouse's Social Security Number.
Source: findlaw, "Alimony and taxes," accessed Sep. 08, 2017