Spousal Maintenance (Alimony) and Income Taxes

David P. Badanes, Esq.

Spousal maintenance (sometimes called alimony) that is paid or received receives special tax treatment.  On your Federal Income Tax returns, spousal maintenance is referred to as alimony.

Whether a payment constitutes “alimony” is determined by the I.R.S. and Federal Law.  Although, your Judgment of Divorce or a Divorce Agreement calls something “alimony” or “spousal maintenance”, this does not mean that the I.R.S. will accept it as alimony.

The I.R.S. has four basic criteria in determining whether the payment you make or receive is “alimony”, they are:

1. The payment is received or paid by a spouse pursuant to a divorce or separation order or agreement.  This means that voluntary payments do not qualify.
2. The divorce or separation order or agreement does not state that the payment is not includible as income or allowed as a deduction.  Your divorce order of agreement should explicitly state that a payment is to be considered as income or is to be considered as a deduction.
3. You and your ex-spouse do not still reside in the same household.  As weird as this sounds, even after a divorce, a couple may choose to live in the same household.  Although, you can live in the same household, then you can’t claim alimony as income or as a deduction.
4. The payment obligation stops at the death of the person paying alimony and there is no liability to make either a cash or property payment as a substitute for the payment after the death of the person paying the alimony.

In addition, the alimony payments can’t have a contingency that involves a child.  For example, if your alimony payments stop when your child support payment stops, then that is a contingency that involves a child and the I.R.S. will not consider it as alimony.  There could be many other contingencies that involve a child that would prevent you from considering your payments received or paid as alimony.

If you are contemplating a divorce and need more information about spousal maintenance (alimony), then it is important to consult with an attorney who knows the rules.  David Badanes and the Badanes Law Office can help you in your divorce and in knowing the rules of spousal maintenance.  If you live in Long Island (Suffolk or Nassau Counties) or in New York City, and are thinking of getting a divorce, call the Badanes Law Office today at: 631-239-1702, email us at david@dbnylaw.com or visit our web site: www.dbnylaw.com.

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