Tax Tip: Alimony Payments Have Tax Implications
When the end of matrimony leads to the start of alimony, how does it affect your taxes? The answer is, alimony payments you receive are taxable to you in the year received.
The amount of alimony received is reported on line 11 of Form 1040. You cannot use Form 1040A or Form 1040EZ. The person making the payment may claim a deduction on Form 1040 in the year paid. You must give the person who paid the alimony your Social Security number or you may have to pay a $50 penalty.
If your decree or agreement calls for both alimony and child support and specifies amounts for each, only the alimony is taxable. Because no taxes are withheld from alimony payments, you may need to make estimated tax payments or increase the amount withheld from your paycheck.
Alimony payments you make may be deductible, if certain requirements are met. Child support payments, however, are never deductible.
For more information on how to treat alimony payments received or made, see Publication 504, Divorced or Separated Individuals, and Tax Topics 406, Alimony Received, and 452, Alimony Paid. Publications and forms may be downloaded from the IRS web site or ordered by calling toll free 1-800-TAX-FORM (1-800-829-3676).