Do You Pay Tax on Alimony?

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Alimony (spousal support) payments are not taxable income for recipients under current IRS rules. The payer cannot deduct these amounts from their taxable income either.

How Alimony Taxation Changed in 2019

The Tax Cuts and Jobs Act of 2017 eliminated the deduction for alimony payments and the requirement to include them as income for divorce or separation agreements executed after December 31, 2018. This applies to modifications of existing agreements where the changes occur after that date.

Key Features of Alimony Payments

To qualify as nontaxable alimony under IRS guidelines, payments must meet specific criteria:

Made with cash or check (not property)
Part of a written divorce or separation agreement
Not designated as non-alimony
Payments cease upon the recipient's death
No joint responsibility for the payment

Common Misconceptions

Many people still assume alimony is taxable income, confusing it with child support payments, which also have different tax treatments. Unlike alimony, child support payments are neither deductible by the payer nor taxable to the recipient.

Worked Example

Consider a divorce agreement finalized in 2020 where the payer agrees to monthly alimony payments of $2,000. Under current rules:

The payer cannot deduct these $2,000 payments from their taxable income
The recipient does not report the $2,000 as income
This differs from pre-2019 agreements where the payer could deduct and the recipient had to report the payments

Special Considerations

Some states may treat alimony differently for state tax purposes, creating complexity for taxpayers in those jurisdictions., lump-sum alimony payments follow different rules than periodic payments.