If a person makes spousal support payments to an ex-spouse or to a third party on their behalf, those payments are tax-deductible because the recipient pays taxes on that income. When the recipient pays the taxes, their rate goes lower than that of the paying spouse. In this article is coverage of spousal support under a maintenance or a divorce decree; it explains alimony deductions and taxes.
Spousal Support Deduction Requirements
Family Law Attorneys in Wichita will tell clients that the laws surrounding spousal support, tax reporting and deductions are complex, and that they have changed over the years. An alimony payment made under a separation or divorce decree is deductible if these requirements are met.
1. The spouses do not file joint tax returns
2. The payments are made in cash
3. The decree doesn’t call the payment something other than spousal support
4. The spouses are not living in the same home when payments are made
5. There’s no continued liability after the receiving spouse’s death
6. The payment is not considered child support
Are Child Support Payments Deductible?
These payments are never deductible. If a divorce or separation decree calls for both child and spousal support and the payments are less than the required total, payments go to child support before alimony.
Are Property and Cash Settlements Regarded as Alimony?
A property settlement, whether it’s in installments or a lump sum, does not qualify as alimony. Nor do payments made outside of a decree. Deductions do not have to be itemized in order for a paying spouse to claim spousal support payments on an upcoming tax return, but the receiving spouse’s Social Security number must be given or the deduction can be disallowed.
Procedures for Reporting Spousal Support on Federal Tax Returns
If a person is receiving alimony, they must report it all as income on their 1040 form (line 11). Receivers who do not give the paying spouse their Social Security number can be subject to a $50 fine. Those who want to learn more about alimony’s effects on tax returns, whether they’re the payer or the receiver, should talk to The Law Offices of Todd Allison and Sarah Newell, who are Family Law Attorneys in Wichita. You ca also visit their Google+ page for more information.
