The Rules for Alimony and Taxes in Tax Year 2019
The Tax Cuts and Jobs Act eliminates this rule beginning in 2019
Alimony payments are no longer deductible beginning in the 2019 tax year—the tax return you'll file in 2020—nor does the recipient have to report them as income. The Tax Cuts and Jobs Act (TCJA) eliminated the alimony deduction from the tax code from 2019 through at least 2025 for most divorce agreements and decrees entered into during that time. Taxpayers can still claim the deduction and must still report the payments for divorces entered into before 2019, however.
The TCJA is set to "sunset" or expire in December 2025, but it's possible that Congress will breathe new life into some or all its provisions for another stretch of years, either under these terms or with some tweaks and changes.
The Old Rules
The old rules still apply if your divorce agreement was executed or your divorce decree was issued in 2018 or earlier. Alimony is still considered taxable income for the recipient, and it's still tax deductible for the payer under the same rules. Payers must still meet certain requirements for these payments to qualify as deductible alimony.
The new rules also apply to divorces finalized and agreements entered into before Dec. 31, 2018 if the decree or agreement is modified after this date and the modification states that the repeal of the alimony deduction applies to the modification.
Reporting Alimony You've Received
You must enter the full amount of any alimony you received on line 2a of Schedule 1 of the 2019 Form 1040. For tax purposes, alimony includes what is sometimes called "separate maintenance"—income received if you're legally separated but not yet technically divorced.
It does not include payments received under the terms of a temporary support order that might be in place while your divorce is pending, nor does it include child support, noncash property settlements, payments that represent community property income, or voluntary payments that aren't required by the divorce decree or agreement.
You do not have to report any amounts you receive for child support. Child support is considered a non-taxable event. It’s not reported on your federal tax return, and the parent paying it cannot claim it as a tax deduction.
Reporting Alimony You've Paid
If you paid alimony or separate maintenance to your ex-spouse, report the total amount on Form 1040 and enter your ex-spouse's Social Security number as well. This lets the IRS know who received the money so the agency can make sure the individual declared it as income.
Don't worry if you don't have your former spouse's Social Security number and they won't give it to you. You can notify the IRS of the problem and your ex can be charged with a $50 penalty for not supplying it to you.
You can claim alimony paid as an "above the line” deduction on line 18a of the Schedule 1 form that goes with the 2019 tax year Form 1040. You don't have to itemize your deductions to claim it. You can claim it and itemize other deductions, or you can claim both the alimony deduction and the standard deduction as well.
Requirements for Deducting Alimony Payments
Deducting the alimony you've paid comes with some requirements and rules:
- You cannot file a joint tax return with your spouse, assuming you’re able to do so because your divorce isn't final yet.
- You must pay alimony in cash, which includes checks or money orders. If you give property or an asset in lieu of alimony, it’s not deductible. The IRS says this is a property settlement.
- Your divorce decree, separate maintenance decree, or written divorce agreement cannot state that the payment is anything other than alimony. In fact, the document should clearly state that it is alimony or separate maintenance, not child support or an aspect of property settlement, because these don't count as alimony.
- You and your former spouse cannot live in the same household when you make the payments.
- You have no liability to continue making payments after the death of your former spouse. Ideally, your divorce decree or separate maintenance agreement should clearly state this as well.
The Recapture Rule
The Internal Revenue Service reserves the right to “recapture” your deductions if it determines that the payments you made don't qualify as alimony. This means that the amount of alimony you deducted must be added back to your income in future tax years, at which time it becomes taxable.
This might happen if the amount of your payments drops significantly within one to two years of your divorce, or if your alimony payments end entirely within three years of your divorce. It might also happen if payments end as soon as your youngest child leaves the nest. The IRS will review your situation to determine if the payments were indeed alimony or separate maintenance.
Specifically, your payments cannot decrease by $15,000 or more in the third year compared to what they were in the second year. Also, the last two years’ payments can’t “decrease significantly” compared to the payment in the first year.
No dollar amount is attached to the “decrease significantly” rule—it’s open to IRS interpretation. The idea is to prevent spouses from camouflaging property settlements as alimony. Property settlements are often completed within the first three years after divorce.
The IRS makes exceptions for circumstances beyond your control, such as if alimony is modified downward by the court due to an unforeseen financial crisis or if the court only orders transitional alimony for a couple of years so the receiving spouse can get back on their financial feet and become self-supporting. These time frames apply more stringently to divorce agreements entered into between spouses as opposed to court orders.
Note: Tax laws change periodically, and you should consult with a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and is not a substitute for tax advice.
Internal Revenue Service. "Changes to Deduction for Certain Alimony Payments Effective in 2019." Accessed March 20, 2020.
United States Congress. "The Tax Cuts and Jobs Act of 2017," Page 36. Accessed March 20, 2020.
Internal Revenue Service. "Form 1040." Accessed March 20, 2020.
Internal Revenue Service. "Topic No. 452 Alimony and Separate Maintenance." Accessed March 20, 2020.
Internal Revenue Service. "Publication 504 Divorced or Separated Individuals," Page 13. Accessed March 20, 2020.
Internal Revenue Service. "Schedule 1 (Form 1040)." Accessed March 20, 2020.
Internal Revenue Service. "Publication 504 Divorced or Separated Individuals," Page 15. Accessed March 20, 2020.
Internal Revenue Service. "Publication 504 Divorced or Separated Individuals," Pages 16-17. Accessed March 20, 2020.
Commonwealth of Massachusetts. "Learn About the Types of Alimony." Accessed March 20, 2020.