The IRS considers alimony you received taxable income while you may be able to deduct alimony you paid to someone else.
As a result of the Tax Cuts and Jobs Act of 2017 (2017 tax reform): any alimony paid under new divorce agreements executed after December 31, 2018 will not be deductible by the payer or reported as income by the recipient. Divorce agreements in effect prior to that date will not change.
What is considered alimony?
According to the IRS, payments that meet all of the following conditions are considered alimony:
- The spouses don't file a joint return with each other
- The payment is made in cash, check, or money order
- The payment is made under a divorce or separation instrument to or for a spouse or former spouse
- The divorce or separation instrument doesn't designate the payment as not alimony
- For spouses who are legally separated under a decree of divorce or of separate maintenance: they cannot be members of the same household when the payment is made.
- There's no liability to make the payment after the death of the recipient spouse
- The payment isn't treated as child support or a property settlement
What if you paid alimony to someone else?
Go to this section in Credit Karma Tax: Alimony Paid
The IRS requires that you include the social security number (SSN) or individual taxpayer identification number (ITIN) of the former spouse receiving the alimony payments. Otherwise, the IRS may disallow your deduction for the payments and you may be charged a $50 penalty.
You can deduct the amount you paid in alimony even if you don’t itemize your deductions.
If you’re having trouble obtaining the SSN or ITIN and you’ve previously filed a joint return with the person you are paying alimony to, you may be able to get their SSN or ITIN from your previous joint return.
What if you received alimony payments?
Go to this section in Credit Karma Tax: Alimony Received
If you received alimony last year, you must include the amount of alimony you received as income. You do not need to provide the SSN or ITIN of the other person when you are reporting alimony income. However, you should provide your SSN or ITIN to your former spouse making the payments, or you could face a $50 penalty.