Unlike child support payments, alimony is to be reported as income by its recipients. Therefore, people who pay alimony are able to deduct the payments on their income tax forms. The deduction is only available if the payments are made according to a divorce or separation order, and voluntary payments do not qualify.
Alimony does not include portions ordered for child support or non-cash property settlements. It also does not include the former spouse’s portion of the community property, so none of those amounts may be deducted. The IRS does not allow a deduction of payments for the upkeep or use of property either.
Third-party payments made under court order for the benefit of the other spouse may count as alimony. People may deduct ordered payments such as life insurance premiums, medical expenses, rent and one-half of court-ordered mortgage payments made on the ex-spouse’s behalf. Similarly, a person who makes real estate tax payments for a property in which the spouse lives and that they own as tenants in common may deduct one-half of the amount. The recipient spouse is required to report all of these types of alimony payments as income.
The ability to deduct alimony is good news for people who are ordered to pay spousal support in their divorces. It is important that people make certain to only deduct the amounts the IRS considers to be alimony. If a combined payment is made for both child support and alimony, only the alimony portion may be deducted. Spouses who receive payments or for whom third-party payments are made must report those payments as income. Failing to do so may subject the recipient spouse to an audit, penalties and fees. If people have questions about the tax treatment of alimony, they may want to consult with their family law attorney.