Page 86 - tmp
P. 86
Alimony Requirements
Divorce and Alimony. Payments are alimony if Not Alimony. Payments are not alimony
Taxes ALL the following are true. if ANY of the following are true.
• Payments are required by • Payments are not required by a
a divorce or separation divorce or separation instrument.
instrument. • Payer and recipient spouse file a joint
Alimony • Payer and recipient spouse do return.
not file a joint return. • Payment is:
Alimony is a payment to or for a spouse or former • Payment is in cash (including – Not in cash.
spouse under a divorce or separation instrument. It does checks and money orders). – A noncash property settlement.
not include voluntary payments not made under the • Payment is not designated in – Spouse’s part of community income.
the instrument as “not alimony.” • Payment is for upkeep or use the
instrument. • Divorced and legally separated payer’s property.
spouses are not members of the • Payment is designated in the
Alimony is deductible by the payer and must be includ- same household when payment instrument as “not alimony.”
ed in the recipient’s income if the divorce or separation is made.* • Divorced and legally separated
instrument was entered into prior to January 1, 2019. • Payments are not required spouses are members of the same
after the death of the recipient
household when payment is made.*
spouse.
New for 2019. Effective for any divorce or separate • Payment is not treated as child • Payments are required after death of
the recipient spouse.
maintenance agreement executed after December 31, support. • Payment is treated as child support.
2018, alimony and separate maintenance payments * A house formerly shared by the spouses is considered one household. Spouses
are not deductible by the payer and are not included are not treated as members of the same household if one spouse is preparing to
in the income of the recipient. This rule also applies to leave and does in fact leave no later than one month after payment. Until divorce
or legal separation is final, spouses can be members of the same household.
an existing divorce or separate maintenance agreement
modified after that date, if the modification expressly
provides that this law applies to the modification. Child Support
Designating payments as “not alimony.” Spouses can Child support is not deductible by the payer or taxable to
agree not to treat otherwise qualifying payments as ali- the recipient. Payments specifically designated as child
mony. A provision clearly instructing that the payment support in a divorce or separation instrument are not al-
is not to be treated as alimony must be included in a di- imony. Payments not specifically designated “child sup-
vorce or separation instrument or in a written statement port” are treated as child support if they are reduced either:
signed by both spouses that refers to a previous written • On the happening of a contingency relating to a
separation agreement. If spouses are subject to tempo- child (reaching a specific age or income level, leaving
rary support orders, the designation must be in an or- school, marrying, becoming employed, dying, leaving
der. A copy of the written instrument must be attached the household, etc.).
to the recipient’s return. • At a time that can be clearly associated with such a
Payments to third parties. Payments to third parties contingency.
under a divorce or separation instrument can qualify as Underpayment of alimony or child support. If alimo-
alimony. Payments are treated as received by the spouse ny and child support are both required under a divorce
and then paid to the third party. The recipient can claim or separation instrument, and payments are less than
deductions for items paid with the alimony. the total required, payments apply first to child support
Home occupied by spouse. If, under the terms of a di- and then to alimony.
vorce or separation instrument, one spouse occupies a
home that belongs to the other, the owner’s payments Contact Us
for mortgage, real estate tax, insurance, and repairs There are many events that occur during the year that can affect
are not alimony. Payments for utilities may be alimony. your tax situation. Preparation of your tax return involves sum-
Rent-free use of property is not alimony. marizing transactions and events that occurred during the prior
year. In most situations, treatment is firmly established at the
time the transaction occurs. However, negative tax effects can
be avoided by proper planning. Please contact us in advance
if you have questions about the tax effects of a transaction or
event, including the following:
• Pension or IRA distributions. • Retirement.
• Significant change in income or • Notice from IRS or other
deductions. revenue department.
• Job change. • Divorce or separation.
This brochure contains general information for taxpayers and • Marriage. • Self-employment.
should not be relied upon as the only source of authority. • Attainment of age 59½ or 70½. • Charitable contributions
Taxpayers should seek professional tax advice for more information. • Sale or purchase of a business. of property in excess of
• Sale or purchase of a residence $5,000.
Copyright © 2019 Tax Materials, Inc. or other real estate.
All Rights Reserved
Powered by TCPDF (www.tcpdf.org)
