Do I Have To Pay Taxes On Alimony?

Do you have to pay income taxes on alimony you receive from a divorce? Like most legal questions, the answer is it depends.

Alimony is not taxable income unless the former spouse paying alimony takes those payments off as a tax deduction. Alimony payments are an allowable deduction in the federal income tax code. But, just because a given deduction is available does not mean a tax payer must take advantage of it.

Thus, it is important for a divorce attorney to fight for a prevision in the separation agreement that prohibits a spouse paying alimony from taking alimony payments off as a tax deduction. If the separation agreement prohibits a spouse to take alimony payments off as a deduction, the alimony recipient will not be required to pay taxes on alimony. Without such a prevision, it is highly likely the recipient of alimony will have to pay taxes on the amount received.

Any lawyer handling a divorce matter should understand the tax implications of receiving alimony. Failure to inform their clients either of the tax implications or to advise them to consult an accountant might be grounds for filing a malpractice lawsuit.

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