After a divorce, it’s common to forget that alimony and child support can affect your taxes. Here’s how.
Tax Reform Effects on Alimony Reporting
Tax Law Update: The Tax Cuts and Jobs Act of 2017 changed the way alimony is treated on tax returns. Key here is the date the divorce was finalized:
- For divorces finalized in 2018 or prior years, alimony you pay is deducted from your taxable income. If you receive alimony, you must report the payments as income on your taxes.
- For divorces finalized in 2019 or later years, alimony you pay is not deductible, and alimony you receive is non-taxable.
For divorces prior to 2019, alimony payments must meet certain requirements to be deductible:
- The payment must be by cash, check or money order.
- You and your spouse can’t live in the same home.
- You can’t count payments made after your ex dies or remarries, since you’re not obligated to pay those.
- The payment cannot be for child support.
If you receive alimony, you must report the payments as income on your taxes, regardless of the finalization date. And you have to give your ex-spouse your SSN, so that he or she can report the payments on their taxes. Your ex can probably get your SSN from a prior tax return, but if he or she doesn’t have your SSN and can’t get it from you, the IRS can fine you $50.
When you do your taxes with 1040.com, report alimony received on our Alimony Received screen. Report alimony paid on our Paid Alimony Adjustment screen.
If you pay child support, you can’t deduct the payments from your taxable income. You just report your income normally, and don’t decrease it by the amount of your support payments.
If you receive child support, you don’t include the amount in your taxable income. You also can't count child support as earned income to qualify you for the Earned Income Credit.
In either case, you do not report child support on your taxes.
If you pay child support, you may be able to claim the child as a dependent. Even though you get no tax break for the support payments, the fact that you are making payments means you at least partly support the child, so you may be able to claim the child as a dependent.