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Question:


Are recipients of alimony and/or child support responsible for paying income tax on these financial supplements?
-MeddlingGrandmother


Answer:


Unlike a lot of divorces, the IRS rules governing alimony and child support are straightforward and reasonable. They appear to be designed so that divorced spouses receive the tax treatment that they would have if they and their families were still intact.
 
Alimony is taxable income to the recipient and deductible for the payer, but to be considered alimony by the IRS certain criteria must be met. For instance, the money must be paid in cash or by check and the two halves of the erstwhile couple must not file a joint tax return or be living in the same household (probably not high hurdles to clear under the circumstances).
 
Child support is not considered taxable income to the recipient, and it’s not deductible for the payer. This makes sense; if a couple were still together, the wife wouldn’t be taxed on money that the husband spent on their kids, right?
 
Some tricky details: Each former spouse must provide his or her Social Security number to the other or face a $50 fine and the possibility that a tax deduction will not be allowed; both parties must file returns on Form 1040, even when they otherwise could file a shorter form; any partial payment between former spouses is treated as nontaxable child support up to the full amount mandated for that purpose in the divorce decree, with any money left over considered taxable alimony.
-Conrad de Aenlle



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