When spouses become separated or obtain a divorce, a court may require that one spouse (payor) pay spousal support (sometimes referred to as “alimony”) to the other (payee). Federal tax law may allow certain payments to a former or separated spouse to be deducted from the payor’s gross income.
- When Can a Spouse Deduct Spousal Support Payments from Federal Income Taxes?
- Under What Circumstances May Spousal Support Payments be Deducted?
- What is Considered an Alimony or Support Payment?
- Are Child Support Payments Deductible?
- When are Payments Not Considered to be Alimony or Separate Maintenance Payments?
- Do Changes in the Law Affect My Ability to Deduct Spousal Support?
- Do I Need a Lawyer for Help With Deductions for Spousal Support?
When Can a Spouse Deduct Spousal Support Payments from Federal Income Taxes?
The law permits a spouse to deduct (subtract) certain spousal support payments from their gross income if those payments were made as part of an order of a divorce. The law also permits deductions when the spouse makes the payments under an agreement of separation.
Under What Circumstances May Spousal Support Payments be Deducted?
Under the law, a spouse may deduct alimony or separate maintenance payments that are made as part of a separation or divorce agreement. However, recent changes in IRS regulations have restricted the scope of these deductions. The IRS has repealed the laws that previously permitted deductions. Under the law now, a spouse cannot deduct alimony or separate maintenance payments (payments made under a separation order) IF:
- The divorce or separation agreement was entered into after 2018; or
- The agreement was made before 2019, but it was later modified, to state that the repeal of deductions applies to the modified agreement.
What is Considered an Alimony or Support Payment?
Not every payment made to a spouse or former spouse is considered to be alimony or separate maintenance payments. For a payment to constitute an alimony or support payment (and therefore be deductible), the following requirements must be met:
- The alimony or separate maintenance payment must be made under an agreement made on December 31, 2018, or earlier;
- The spouses are not currently filing a joint tax return. A joint tax return is a tax return that a couple files when married. On the return, the couple indicates that their filing status is “filing jointly;”
- The payment must be in the form of money. Money consists of actual cash. Money also consists of money orders and checks;
- At the time the payment is made, the couple does not reside in the same household.
- The legal obligation to make the payment must terminate before the spouse receiving the payments dies; and
- he payment is not part of a property settlement order. A property settlement order provides for which spouse receives specific real property (land or a house). The property is property that was acquired before or during marriage.
Are Child Support Payments Deductible?
Child support payments are not deductible from a spouse’s income. The law does not regard these payments as alimony or support payments. If a divorce or separation decree orders payment of both alimony. In some instances, a divorce or separation decree requires a spouse to pay both alimony and child support.
Sometimes, the spouse required to pay is only able to make a partial payment. Under the law, the partial payment is first applied to child support. If there is money “left over” for alimony, that remaining money is paid toward alimony, and is tax-deductible.
When are Payments Not Considered to be Alimony or Separate Maintenance Payments?
Certain payments from one spouse to the other are not treated by the law as alimony or separate maintenance. This means that these payments cannot be deducted from income as alimony or separate maintenance payments. Payments that cannot be deducted from income as alimony or separate maintenance payments include:
- Payments made under a diviorce or separation agreement entered into on January 1, 2019, or later.
- Property settlements that are not in the form of cash. If a spouse makes payments by giving the other spouse real property, the payment is not deductible from income
- Income that is your spouse’s share of community property. Certain states are community property states. In these states, income acquired by one spouse during the marriage is regarded as the property of both spouses.
- Payments that are voluntary (not part of a divorce or separation agreement).
Do Changes in the Law Affect My Ability to Deduct Spousal Support?
Separate maintenance payments and alimony payments cannot be deducted from the income of the spouse making the payment, if the payments are made under an agreement made on January 1, 2019 or later. Alimony or separate maintenance is deductible, if the payments were made as part of an agreement made on December 31, 2018, or earlier.
Do I Need a Lawyer for Help With Deductions for Spousal Support?
If you have made spousal support payments and are unsure as to whether these payments can be deducted from income, you should contact a family lawyer. An experienced family law attorney near you can advise you as to what payments can be deducted and what payments cannot be deducted.
A family law attorney can also represent you at hearings and court proceedings. You may also wish to seek the advice of a tax attorney. The 2017 Tax Cuts and Jobs Act made a number of changes to tax law. An experienced tax attorney can advise you as to whether these changes affect your spousal support tax obligations.