The tax treatment of alimony (spousal support) depends on when your divorce or separation agreement was finalized or modified.
Agreements Finalized Before January 1, 2019
If your divorce or separation agreement was executed on or before December 31, 2018, and not modified to adopt the new rules, then:
- Alimony payments are deductible by the payer on their federal tax return
- Alimony received is taxable income to the recipient
This treatment continues unless the agreement was modified after 2018 and the modification explicitly states that the new tax rules apply.
Agreements Finalized or Modified on or After January 1, 2019
Under the Tax Cuts and Jobs Act (TCJA):
- Alimony payments are no longer deductible by the payer
- Alimony received is no longer taxable to the recipient
This applies to:
- New divorce or separation agreements executed on or after January 1, 2019
- Older agreements modified after 2018 that opt into the new rules
What Counts as Alimony?
To qualify as alimony under federal tax law, payments must:
- Be made in cash (including checks or money orders)
- Be made under a divorce or separation instrument
- Not be designated as non-taxable/non-deductible
- End upon the recipient’s death
- Not to be treated as child support or property settlement.
What’s Not Alimony?
- Child support
- Noncash property settlements
- Payments to maintain the payer’s property
- Voluntary payments not required by a legal agreement