April 8, 2011 12:00 am

Payments under a Spousal Support Affidavit Are Deductible Alimony

Payments can be treated as deductible alimony only if they meet certain requirements. One key requirement is that the payments are made pursuant to a decree of divorce or a written instrument incident requiring a spouse to make payments for the support or maintenance of the other spouse. A payment made pursuant to an oral agreement does not meet this requirement.

In one recent case, a couple agreed orally that the husband, who had separated from his wife, would pay her $1,250 every two weeks. The husband then signed a spousal support affidavit before a notary and made payments according to the affidavit until he became ill. The wife’s attorney inquired about the reason why he stopped making payments that had been agreed to and memorialized in the affidavit.

The IRS said that no deductions could be claimed for the taxpayer’s payments to his wife because they were made under an oral agreement. The Tax Court, however, allowed the deductions. The affidavit, combined with the wife’s attorney’s reference to it, showed that there had been a meeting of the minds concerning alimony; the affidavit was, in effect, a written separation agreement.

Source: Timothy Owen Micek; T.C. Summ. Op. 2011-45

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A tax credit directly reduces tax liability, as opposed to a deduction that reduces income subject to tax.

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