A new year means W2s and other paperwork arriving which forces us to turn our attention to our 2017 taxes. With that fiscal year closed, those who are new to a divorce settlement that includes alimony or child support may have questions about how this impacts their tax return. While it may actually be simpler to file as an individual, rather than as a couple in year's past, you may be finding this process as unfamiliar, especially if your ex-spouse usually handled the financials and the tax return.
For those who are thinking of receiving alimony or child support in your pending divorce decree, it's good to take note of how it might affect your next year's tax filing. For those who make alimony payments to an ex-spouse, they are usually tax-deductible. That means they can be written off from income on a tax return. Certain stipulations must be met including that you are not filing a joint return together, you pay in cash, you aren't living in the same household as your ex-spouse and your payment is not for child support.
If you are a spouse who is receiving alimony, you must record this as income on line 11 of your tax filing, form 1040. That means this is considered taxable income, just as wages from a job would be considered taxable. However, each person's tax situation will be different based on deductions or situations that affect each person and their tax return. Child support is never deductible by the payee and child support is also not considered as taxable income for those who receive it.
There are certainly big differences between spousal support and child support. This is even evident on your tax filing as they are treated completely different by the government. Both may be made in cash payments from one ex-spouse to the other ex-spouse. However, they are for very different things. That's why there is such a disparity for how they are handled on tax filings.
Source: family.findlaw.com, "Alimony and Taxes," Accessed January 23, 2018