Tax Rules for Alimony Payments
Planning Alimony and Marital Settlements
Alimony payments that meet tax law tests are deductible if you pay them; they're taxable if you receive them. Payments are not deductible by the payer unless they are taxable to the recipient.
You can deduct alimony payments you make from gross income; you are not required to itemize personal deductions to write off these payments. There is no dollar limit or other ceiling on claiming this deduction. The only requirement: You must include the recipient's Social Security number on your return (if you pay alimony to more than one ex-spouse, enter one number on the return and attach a statement you prepare showing the other number or numbers, which you attach to the return).
If you receive taxable alimony, report it as income on the line provided on your tax return. Also enter the payer's Social Security number. Failing to include this Social Security number results in a $50 penalty.
Transfers between spouses during the marriage as well as transfers incident to divorce generally are tax-free exchanges. The transferor-spouse does not realize any gain or loss on the transfer. The recipient-spouse takes the transferor's basis in the property and will report gain or loss when the property is later sold.
Child support payments are never deductible by the payer or taxable to the parent who receives them on behalf of the child.
