This chapter discusses the
rules that apply if you pay or
receive alimony. It covers the
following topics:
What payments are
alimony,
What payments are
not alimony, such as
child support,
How to deduct
alimony you paid,
How to report
alimony income you
received, and
Whether you must
recapture the tax
benefits of alimony.
Recapture means adding
back in your income all
or part of a deduction
you took in a prior
year.
Alimony is a payment to or
for a spouse or former spouse
under a divorce or separation
instrument. It does not include
voluntary payments that are not
made under a divorce or
separation instrument.
Alimony is deductible by the
payer and must be included in
the spouse's or former spouse's
income. Although this chapter is
generally written for the payer
of the alimony, the recipient
can use the information to
determine whether an amount
received is alimony.
To be alimony, a payment must
meet certain requirements.
Different requirements apply to
payments under instruments
executed after 1984 and to
payments under instruments
executed before 1985. This
chapter discusses the rules for
payments under instruments
executed after 1984. For the
rules for payments under
pre-1985 instruments, see
Publication 504, Divorced or
Separated Individuals.
This is the last year the
information on pre-1985
instruments will be included in
Publication 504. If you will
need this information in future
years, you should get and keep a
copy of this year's Publication
504.
Use Table 20-1 in this
chapter as a guide to determine
whether certain payments are
considered alimony.
Definitions. The
following definitions apply
throughout this chapter.
Spouse
or former spouse.
Unless otherwise stated in
the following discussions
about alimony, the term “spouse”
includes former spouse.
Divorce
or separation instrument.
The term “divorce
or separation instrument”
means:
A decree of
divorce or separate
maintenance or a
written instrument
incident to that
decree,
A written
separation
agreement, or
A decree or any
type of court order
requiring a spouse
to make payments for
the support or
maintenance of the
other spouse. This
includes a temporary
decree, an
interlocutory (not
final) decree, and a
decree of alimony
pendente lite
(while awaiting
action on the final
decree or
agreement).
Useful Items - You
may want to see:
Publication
504
Divorced or Separated
Individuals
General Rules
The following rules apply to
alimony regardless of when the
divorce or separation instrument
was executed.
Payments
not alimony.
Not all payments under a
divorce or separation
instrument are alimony.
Alimony does not include any
of the following.
Child support.
Noncash property
settlements.
Payments that
are your spouse's
part of community
income. (See
Community
Property
in Publication 504.)
Payments to keep
up the payer's
property.
Use of property.
Payments to
a third party.
Cash payments (including
checks and money orders) to
a third party on behalf of
your spouse under the terms
of your divorce or
separation instrument may be
alimony if they otherwise
qualify. These include
payments for your spouse's
medical expenses, housing
costs (rent, utilities,
etc.), taxes, tuition, etc.
The payments are treated as
received by your spouse and
then paid to the third
party.
Life
insurance premiums.
Alimony includes premiums
you must pay under your
divorce or separation
instrument for insurance on
your life to the extent your
spouse owns the policy.
Payments
for jointly-owned home.
If your divorce or
separation instrument states
that you must pay expenses
for a home owned by you and
your spouse or former
spouse, some of your
payments may be alimony.
Mortgage payments.
If you must pay all the
mortgage payments (principal
and interest) on a
jointly-owned home, and they
otherwise qualify, you can
deduct one-half of the total
payments as alimony. If you
itemize deductions and the
home is a qualified home,
you can claim half of the
interest in figuring your
deductible interest. Your
spouse must report one-half
of the payments as alimony
received. If your spouse
itemizes deductions and the
home is a qualified home, he
or she can claim one-half of
the interest on the mortgage
in figuring deductible
interest.
Taxes
and insurance.
If you must pay all the
real estate taxes or
insurance on a home held as
tenants in common, you can
deduct one-half of these
payments as alimony. Your
spouse must report one-half
of these payments as alimony
received. If you and your
spouse itemize deductions,
you can each claim one-half
of the real estate taxes and
none of the home insurance.
If your home is held
as tenants by the entirety
or joint tenants, none of
your payments for taxes or
insurance are alimony. But
if you itemize deductions,
you can claim all of the
real estate taxes and none
of the home insurance.
Other
payments to a third party.
If you made other
third-party payments, see
Publication 504 to see
whether any part of the
payments qualifies as
alimony.
Instruments Executed
After 1984
The following rules for
alimony apply to payments under
divorce or separation
instruments executed after 1984.
Exception
for instruments executed
before 1985.
There are two situations
where the rules for
instruments executed after
1984 apply to instruments
executed before 1985.
A divorce or
separation
instrument executed
before 1985 and then
modified after 1984
to specify that the
after-1984 rules
will apply.
A temporary
divorce or
separation
instrument executed
before 1985 and
incorporated into,
or adopted by, a
final decree
executed after 1984
that:
Changes
the amount
or period of
payment, or
Adds or
deletes any
contingency
or
condition.
For the rules for alimony
payments under pre-1985
instruments not meeting
these exceptions, see
Instruments Executed Before
1985 in
Publication 504.
Example 1.
In November 1984, you
and your former spouse
executed a written
separation agreement. In
February 1985, a decree
of divorce was
substituted for the
written separation
agreement. The decree of
divorce did not change
the terms for the
alimony you pay your
former spouse. The
decree of divorce is
treated as executed
before 1985. Alimony
payments under this
decree are not subject
to the rules for
payments under
instruments executed
after 1984.
Example 2.
Assume the same facts
as in
Example 1
except that the decree
of divorce changed the
amount of the alimony.
In this example, the
decree of divorce is not
treated as executed
before 1985. The alimony
payments are subject to
the rules for payments
under instruments
executed after 1984.
Alimony
requirements.
A payment to or for a
spouse under a divorce or
separation instrument is
alimony if the spouses do
not file a joint return with
each other and all the
following requirements are
met.
The payment is
in cash.
The instrument
does not designate
the payment as not
alimony.
The spouses are
not members of the
same household at
the time the
payments are made.
This requirement
applies only if the
spouses are legally
separated under a
decree of divorce or
separate
maintenance.
There is no
liability to make
any payment (in cash
or property) after
the death of the
recipient spouse.
The payment is
not treated as child
support.
Each of these requirements
is discussed next.
Payments
must be in cash.
Only cash payments,
including checks and money
orders, qualify as alimony.
The following do not qualify
as alimony.
Transfers of
services or property
(including a debt
instrument of a
third party or an
annuity contract).
Execution of a
debt instrument by
the payer.
The use of
property.
Payments to a third party.
Cash payments to a third
party under the terms of
your divorce or separation
instrument can qualify as a
cash payment to your spouse.
See Payments to a third
party under
General Rules,
earlier.
Also, cash payments made
to a third party at the
written request of your
spouse qualify as alimony if
all the following
requirements are met.
The payments are
in lieu of payments
of alimony directly
to your spouse.
The written
request states that
both spouses intend
the payments to be
treated as alimony.
You receive the
written request from
your spouse before
you file your return
for the year you
made the payments.
Payments
designated as not alimony.
You and your spouse can
designate that otherwise
qualifying payments are not
alimony. You do this by
including a provision in
your divorce or separation
instrument that states the
payments are not deductible
as alimony by you and are
excludable from your
spouse's income. For this
purpose, any instrument
(written statement) signed
by both of you that makes
this designation and that
refers to a previous written
separation agreement is
treated as a written
separation agreement. If you
are subject to temporary
support orders, the
designation must be made in
the original or a later
temporary support order.
Your spouse can exclude
the payments from income
only if he or she attaches a
copy of the instrument
designating them as not
alimony to his or her
return. The copy must be
attached each year the
designation applies.
Spouses
cannot be members of the
same household.
Payments to your spouse
while you are members of the
same household are not
alimony if you are legally
separated under a decree of
divorce or separate
maintenance. A home you
formerly shared is
considered one household,
even if you physically
separate yourselves in the
home.
You are not treated as
members of the same
household if one of you is
preparing to leave the
household and does leave no
later than 1 month after the
date of the payment.
Exception. If you
are not legally separated
under a decree of divorce or
separate maintenance, a
payment under a written
separation agreement,
support decree, or other
court order may qualify as
alimony even if you are
members of the same
household when the payment
is made.
Table 20-1.Alimony
Requirements
(Instruments
Executed After
1984)
Payments ARE
alimony if
all
of the following
are true:
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 or 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.
Spouses legally
separated under
a decree of
divorce or
separate
maintenance are
not members of
the same
household.
Spouses legally
separated under
a decree of
divorce or
separate
maintenance are
members of the
same household.
Payments are not
required after
death of the
recipient
spouse.
Payments are
required after
death of the
recipient
spouse.
Payment is not
treated as child
support.
Payment is
treated as child
support.
These
payments are
deductible by
the payer and
includible in
income by the
recipient.
These
payments are
neither
deductible by
the payer nor
includible in
income by the
recipient.
Liability
for payments after death of
recipient spouse.
If you must continue to
make payments for any period
after your spouse's death,
the part of the payment that
would continue is not
alimony whether made before
or after the death. If all
of the payment would
continue, then none of the
payments made before or
after the death are alimony.
The divorce or separation
instrument does not have to
expressly state that the
payments cease upon the
death of your spouse if, for
example, the liability for
continued payments would end
under state law.
Example.
You must pay your
former spouse $10,000 in
cash each year for 10
years. Your divorce
decree states that the
payments will end upon
your former spouse's
death. You must also pay
your former spouse or
your former spouse's
estate $20,000 in cash
each year for 10 years.
The death of your spouse
would not terminate
these payments under
state law.
The $10,000 annual
payments are alimony.
But because the $20,000
annual payments will not
end upon your former
spouse's death, they are
not alimony.
Substitute payments.
If you must make any
payments in cash or property
after your spouse's death as
a substitute for continuing
otherwise qualifying
payments, the otherwise
qualifying payments are not
alimony. To the extent that
your payments begin,
accelerate, or increase
because of the death of your
spouse, otherwise qualifying
payments you made may be
treated as payments that
were not alimony. Whether or
not such payments will be
treated as not alimony
depends on all the facts and
circumstances.
Example 1.
Under your divorce
decree, you must pay
your former spouse
$30,000 annually. The
payments will stop at
the end of 6 years or
upon your former
spouse's death, if
earlier.
Your former spouse
has custody of your
minor children. The
decree provides that if
any child is still a
minor at your spouse's
death, you must pay
$10,000 annually to a
trust until the youngest
child reaches the age of
majority. The trust
income and corpus
(principal) are to be
used for your children's
benefit.
These facts indicate
that the payments to be
made after your former
spouse's death are a
substitute for $10,000
of the $30,000 annual
payments. $10,000 of
each of the $30,000
annual payments is not
alimony.
Example 2.
Under your divorce
decree, you must pay
your former spouse
$30,000 annually. The
payments will stop at
the end of 15 years or
upon your former
spouse's death, if
earlier. The decree
provides that if your
former spouse dies
before the end of the
15-year period, you must
pay the estate the
difference between
$450,000 ($30,000 × 15)
and the total amount
paid up to that time.
For example, if your
spouse dies at the end
of the tenth year, you
must pay the estate
$150,000 ($450,000 -
$300,000).
These facts indicate
that the lump-sum
payment to be made after
your former spouse's
death is a substitute
for the full amount of
the $30,000 annual
payments. None of the
annual payments are
alimony. The result
would be the same if the
payment required at
death were to be
discounted by an
appropriate interest
factor to account for
the prepayment.
Child
support.
A payment that is
specifically designated as
child support or treated as
specifically designated as
child support under your
divorce or separation
instrument is not alimony.
The designated amount or
part may vary from time to
time. Child support payments
are neither deductible by
the payer nor taxable to the
recipient.
Specifically designated as
child support. A
payment will be treated as
specifically designated as
child support to the extent
that the payment is reduced
either:
On the happening
of a contingency
relating to your
child, or
At a time that
can be clearly
associated with the
contingency.
A payment may be treated as
specifically designated as
child support even if other
separate payments are
specifically designated as
child support.
Contingency relating to your
child. A
contingency relates to your
child if it depends on any
event relating to that
child. It does not matter
whether the event is certain
or likely to occur. Events
relating to your child
include the child's:
Becoming
employed,
Dying,
Leaving the
household,
Leaving school,
Marrying, or
Reaching a
specified age or
income level.
Clearly
associated with a
contingency.
Payments are presumed to
be reduced at a time clearly
associated with the
happening of a contingency
relating to your child only
in the following situations.
The payments are
to be reduced not
more than 6 months
before or after the
date the child will
reach 18, 21, or
local age of
majority.
The payments are
to be reduced on two
or more occasions
that occur not more
than 1 year before
or after a different
one of your children
reaches a certain
age from 18 to 24.
This certain age
must be the same for
each child, but need
not be a whole
number of years.
In all other situations,
reductions in payments are
not treated as clearly
associated with the
happening of a contingency
relating to your child.
Either you or the IRS can
overcome the presumption in
the two situations above.
This is done by showing that
the time at which the
payments are to be reduced
was determined independently
of any contingencies
relating to your children.
For example, if you can show
that the period of alimony
payments is customary in the
local jurisdiction, such as
a period equal to one-half
of the duration of the
marriage, you can treat the
amount as alimony.
How To Deduct
Alimony Paid
You can deduct alimony you
paid, whether or not you itemize
deductions on your return. You
must file Form 1040. You cannot
use Form 1040A or Form 1040EZ.
Enter the amount of alimony
you paid on Form 1040, line 34a.
In the space provided on line
34b, enter your spouse's social
security number.
If you paid alimony to more
than one person, enter the
social security number of one of
the recipients. Show the social
security number and amount paid
to each other recipient on an
attached statement. Enter your
total payments on line 34a.
If you do not provide your
spouse's social security number,
you may have to pay a $50
penalty and your deduction may
be disallowed.
How To Report
Alimony Received
Report alimony you received
on Form 1040, line 11. You
cannot use Form 1040A or Form
1040EZ.
You must give the person who
paid the alimony your social
security number. If you do not,
you may have to pay a $50
penalty.
Recapture Rule
If your alimony payments
decrease or terminate during the
first 3 calendar years, you may
be subject to the recapture
rule. If you are subject to this
rule, you have to include in
income in the third year part of
the alimony payments you
previously deducted. Your spouse
can deduct in the third year
part of the alimony payments he
or she previously included in
income.
The 3-year period starts with
the first calendar year you make
a payment qualifying as alimony
under a decree of divorce or
separate maintenance or a
written separation agreement. Do
not include any time in which
payments were being made under
temporary support orders. The
second and third years are the
next 2 calendar years, whether
or not payments are made during
those years.
The reasons for a reduction
or termination of alimony
payments that can require a
recapture include:
A change in your
divorce or separation
instrument,
A failure to make
timely payments,
A reduction in your
ability to provide
support, or
A reduction in your
spouse's support needs.
When to
apply the recapture rule.
You are subject to the
recapture rule in the third
year if the alimony you pay
in the third year decreases
by more than $15,000 from
the second year or the
alimony you pay in the
second and third years
decreases significantly from
the alimony you pay in the
first year.
When you figure a decrease
in alimony, do not include
the following amounts.
Payments made
under a temporary
support order.
Payments
required over a
period of at least 3
calendar years of a
fixed part of your
income from a
business or
property, or from
compensation for
employment or
self-employment.
Payments that
decrease because of
the death of either
spouse or the
remarriage of the
spouse receiving the
payments.
Figuring
the recapture. You can
use Worksheet A in
Publication 504 to figure
recaptured alimony.
Including
the recapture in income.
If you must include a
recapture amount in income,
show it on Form 1040, line
11 (“Alimony
received”). Cross out
“received”
and enter “recapture.”
On the dotted line next to
the amount, enter your
spouse's last name and
social security number.
Deducting
the recapture.
If you can deduct a
recapture amount, show it on
Form 1040, line 34a (“Alimony
paid”). Cross out “paid”
and enter “recapture.”
In the space provided, enter
your spouse's social
security number.
