Posted by Dennis Jao

Alimony Payments

Alimony Payments

What is alimony payment? 

This is a payment between current spouses or ex-spouses due to an ongoing separation in a marriage or divorce. Alimony (sometimes called support) payments are also referred to as fixed-term benefit payments made by the payer or one spouse to the other spouse or beneficiary due to a legal order or court order.

Alimony payments are legal obligations generally assumed by the current ex-spouse with the highest income to the other beneficiary spouse. The details of the actual value of the payment are the result of many factors. For example, the marriage duration, the conditions agreed by both parties or following a decision of the divorce court. For example, a judge may decide that alimony payments do not apply if both spouses' income is the same during the marriage. However, the judge may set an expiry date on which the child allowance payments or the financial support must be canceled. This decision can be based on the following:

  • The Beneficiary spouse makes no effort to earn an independent income.

  • The couple's children or dependents no longer need payments to maintain their lifestyle. 

  • The paying spouse can no longer earn income for support.

  • The receiving spouse gets remarried. 

  • The spouse who pays or receives dies

Alternatively, if the paying spouse refuses to pay child support, the beneficiary spouse can go to court. The result may result in criminal or civil expenses for the paying spouse.

The following criteria for alimony payment should be considered as such:

  • Alimony payments must be made by check, cash, or money order.

  • Both spouses must file separate income tax returns.

  • Spouses must live separately or in separate places

  • The document or deed of divorce or separation must indicate that the payments to be made from one spouse to another are, in fact, alimony.

  • There is no obligation for the paying spouse to continue paying child support after the receiving spouse's death.


Are there any tax deductions for alimony payments?

Due to the TCJA 2018, there are no longer tax deductions for the paying spouse if the divorce agreement was signed after December 31, 2018. If the divorce has taken place before this date, the alimony payment is considered a tax deduction for the paying spouse.

Therefore, in order to determine whether it is possible to deduct (as a person paying alimony) or to declare (as a recipient or recipient of alimony payment) alimony payments in the 2020 income tax return, the year in which they divorced or finalized the separation is a deciding factor.


Divorce or separation agreement made in 2018 or any previous year

  • Alimony recipient or payee: You must report alimony payments received from your ex-spouse as income on state and federal income tax returns for the tax year you received payments. Changes to the current tax law on child support payments received do not apply to your 2020 taxable income or any tax return pre or post your divorce or separation agreement made in 2018 or the previous year. You must report your alimony payments received as paid to you by the payor on one of the forms listed above in the Support Payor section. You must enter the SSN or ITIN of the spouse or ex-spouse receiving the payments. Otherwise, the deduction could be denied, and you will have to pay a fine of $50.

  • Support payer: As a paying spouse, you can deduct alimony payments you make to your current or former spouse or former recipient on your federal and state income tax returns for the tax year in which you make payments. The current tax law changes regarding alimony support payments do not apply to your 2020 taxable income or any tax return pre or post your divorce or separation agreement made in 2018 or the previous year. You can claim the alimony payment as a tax deduction on your tax form if it ends with the death of the beneficiary spouse, is authorized by a court decision for legal separation or divorce, is in the form of cash (including checks or money orders), is included in the taxable income of the beneficiary spouse, is made only when you and your spouse are not members of the same family, and you and your ex-spouse file separate income tax returns.


The divorce or separation agreement was finalized in 2019 or any later year.

  • Alimony payer: You cannot deduct alimony payments you make to your ex-spouse from federal and state income tax returns for the fiscal year you make the payments. The alimony payment current changes would apply to your 2020 tax return or any subsequent tax return if your divorce or separation agreement were finalized in 2019 or a later year. 

  • Support payer: You do not have to report support payments made as a payer on your return or report them as a recipient on federal and state income tax returns for the year in which you have received the payments. Changes to applicable tax laws regarding alimony payments received apply to your 2020 income tax return or any subsequent income tax return if your divorce or separation agreement was made in 2019 or later. 


Note: Some tax advisers have suggested that the spouse or higher income payer grant the recipient spouse an IRA instead of making cash payments. This strategy would essentially be a tax deduction.


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Dennis Jao
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