Alimony Paid
Alimony payments received from a spouse or former spouse are considered to be taxable income in the year received. The amount received is reported on Form 1040. Form 1040A or Form 1040EZ cannot be used. The person making the alimony payment may claim a deduction in the year it was paid on Form 1040. The social security number of the recipient must be included on Form 1040.
Do not include child support payments as alimony. If a decree or agreement calls for both alimony and child support and specifies amounts for each, only the alimony is taxable.
Alimony Received
You do not have to itemize deductions to deduct your alimony payments. You must claim the deduction on Form 1040. You cannot use Form 1040A or Form 1040EZ. You must provide the social security number of the spouse or former spouse receiving the payments. If you don’t, you may have to pay a $50 penalty and your deduction may be disallowed.
If you are the spouse or former spouse who is receiving the alimony, you must report the full amount as income on your Form 1040. You cannot use Form 1040A or Form 1040EZ. If you do not give your social security number to your spouse or former spouse who is making the alimony payments, you may have to pay a $50 penalty.
| Alimony: Payments are alimony if ALL of the following are true | Not Alimony: Payments are not alimony if ANY of the following are true |
| Payments are required by a divorce or separation instrument. | Payments are not required by a divorce or separation instrument. |
| Payer and recipient spouse do not file a joint return. | Payer and recipient spouse file a joint return |
| Payment is in cash (including checks and money orders). | Payment is: • Not in cash • A noncash property settlement • Spouse’s part of community income, or • To keep up the payer’s property |
| Payment is not designated in the instrument as ‘not alimony.’ | Payment is designated in the instrument as ‘not alimony.’ |
| Divorced and legally separated spouses are not members of the same household when payment is made.1 | Divorced and legally separated spouses are members of the same household when payment is made.1 |
| Payments are not required after death of the recipient spouse.2 | Payments are required after death of the recipient spouse.2 |
| Payment is not treated as child support. | Payment is treated as child support. |
1 A house formerly shared by the spouse is considered one household. Spouses are not treated as members of the same household if one spouse is preparing 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.
2 If payments can continue after death, the part of the payment that would continue is not alimony whether made before or after death. The divorce or separation instrument does not need to expressly state that payment ceases if liability for payments ends by operation of law.
NOTE: This is a guide on entering Alimony Paid or Alimony Received into Keystone Tax Solutions. This is not intended as tax advice.