Currently, amounts paid to a spouse or a former spouse under a divorce or separation instrument (including a divorce decree, a separate maintenance decree, or a written separation agreement) may be alimony for federal tax purposes. Alimony is income to the receiving spouse.
There is no change in tax treatment for divorces signed through December 31, 2018. However, in general, for divorces signed after December 31, 2018, the spouse or former spouse receiving alimony will no longer include the alimony in income.
The spouse receiving the alimony must include the amount received in income.
Note: To qualify as alimony, payments must meet certain requirements.
|Alimony and separate maintenance payments aren’t included in income of the receiving spouse.|
The repeal of including alimony and separate maintenance payments into income applies to any divorce or separation instrument signed after December 31, 2018, or for any divorce or separation instrument signed on or before December 31, 2018, and changed after that date, if the change clearly includes the new tax rule.
How will this affect me?
Emma pays Noah $1,500 of alimony per month based on their divorce decree signed in 2016. Noah will continue to include $18,000 in income and in future tax years.
Noah and Emma signed their divorce decree in 2018 and Noah was awarded alimony. Since they signed the divorce decree in 2018, the alimony that Emma pays Noah will be included in Noah’s 2018 income.
Note: If Noah and Emma had divorced after 2018, Noah wouldn’t include any alimony received in income.