Article: 50568
Overview
The IRS made significant changes to how alimony and separate maintenance payments are treated for tax purposes. Whether payments are deductible or taxable depends on when the divorce or separation agreement was executed.
IRS Rules on Alimony
- Agreements executed after December 31, 2018
- Payers: Cannot deduct alimony or separate maintenance payments.
- Recipients: Do not include alimony received as taxable income.
- Agreements executed before January 1, 2019
- If the agreement has not been modified, the old rules apply:
- Payers may deduct alimony.
- Recipients must include alimony as taxable income.
- If the agreement was modified after 2018 and the modification specifically states that the new rules apply, then the payments are not deductible by the payer and not taxable to the recipient.
How to Manage Alimony Forms in the Software
If you need to enter or adjust alimony information:
- Go to Federal Taxes from the left sidebar (or top-left corner on mobile).
- Click Review.
- Select “I’d like to see the forms I’ve filled out or search for a form.”
- From here, you can:
- View your existing alimony forms.
- Search for “Paid Alimony Adjustments” or “Alimony Received.”
- Add, edit, or delete the relevant forms as needed.
- Once finished, continue with your filing.
Example
- Pre-2019 divorce (unmodified): John pays $6,000 in alimony in 2017 under a divorce decree and continues payments in 2023. He may still deduct the payments, and his ex-spouse must include them as income.
- Post-2018 divorce (or modified pre-2019): Sarah pays $8,000 in alimony under a divorce finalized in 2020. She cannot deduct the payments, and her ex-spouse does not report as income.
Additional Resources
For official guidance, see the IRS page on alimony and separate maintenance: https://www.irs.gov/taxtopics/tc452