If you receive alimony, spousal support, or any other payments from a former spouse that are not treated as child support or part of a property settlement, you must report the payments as alimony. These payments are fully taxable as ordinary income.
If you make these payments, you can fully deduct them. You’ll have to provide the Social Security number of your spouse or former spouse.
To be treated as alimony for income and deduction purposes, all of the following conditions must apply:
Break: Even though you do not work, you can fund an IRA or Roth IRA based on alimony payments you receive. Under a special tax rule, alimony is treated as earned income for purposes of contributing to an IRA/Roth IRA.
The number of individual returns filed swelled from 14 million in 1940 to almost 60 million by 1960 and now stands at 150 million.
–Remarks of IRS Commissioner Douglas Shulman, 4/13/09View all factoids