{"id":4502,"date":"2022-03-01T07:36:00","date_gmt":"2022-03-01T07:36:00","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=4502"},"modified":"2022-10-28T09:10:10","modified_gmt":"2022-10-28T09:10:10","slug":"is-alimony-taxable-in-2021","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/","title":{"rendered":"Is Alimony Taxable?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-600x333.webp 600w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-300x167.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-768x427.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-150x83.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable.webp 810w\" sizes=\"(max-width: 810px) 100vw, 810px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable.png\" height=\"450\" width=\"810\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-600x333.png 600w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-300x167.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-768x427.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable-150x83.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2021\/06\/is-alimony-taxable.png 810w\" sizes=\"(max-width: 810px) 100vw, 810px\" class=\"wp-image-4504 sp-no-webp\" alt=\"\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>Alimony taxable or not must be hovering in the mind of persons who are considering or in process of separation. The simple answer to the said question is that there is no tax on receipt of alimony and likewise there is no allowance for deduction of alimony from your taxable income while <a href=\"https:\/\/www.irstaxapp.com\/irs-verification-of-non-filing-letter-5-things-every-student-should-know\/\">filing taxes<\/a>.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d99683a5e8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662d99683a5e8\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Is_alimony_taxable_Income_after_December_2018\" title=\"Is alimony taxable Income after December 2018?\">Is alimony taxable Income after December 2018?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Why_is_alimony_no_longer_deductible\" title=\"Why is alimony no longer deductible?\">Why is alimony no longer deductible?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#What_if_divorce_or_separation_agreement_modified_after_2018\" title=\"What if divorce or separation agreement modified after 2018?\">What if divorce or separation agreement modified after 2018?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Can_alimony_be_invested_in_IRAs\" title=\"Can alimony be invested in IRAs? \">Can alimony be invested in IRAs? <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Do_I_need_to_report_alimony_on_tax_return\" title=\"Do I need to report alimony on tax return?\">Do I need to report alimony on tax return?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Is_alimony_taxable_in_hands_of_a_non-resident_alien_spouse\" title=\"Is alimony taxable in hands of a non-resident alien spouse?\">Is alimony taxable in hands of a non-resident alien spouse?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Is_spousal_support_taxable_in_California\" title=\"Is spousal support taxable in California ?\">Is spousal support taxable in California ?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.irstaxapp.com\/is-alimony-taxable-in-2021\/#Is_alimony_taxable_in_New_York\" title=\"Is alimony taxable in New York?\">Is alimony taxable in New York?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_alimony_taxable_Income_after_December_2018\"><\/span>Is alimony taxable Income after December 2018?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The alimony is not taxable<\/strong> now because section <em>11051 of the Tax Cuts and Jobs Act (TCJA) <\/em>law relating to the taxation of alimony or divorce settlement was amended. So, consequently, <a href=\"https:\/\/irc.bloombergtax.com\/public\/uscode\/doc\/irc\/section_71\" target=\"_blank\" rel=\"noopener\">section 71 of IRC<\/a> was repealed.<\/p>\n\n\n\n<p>It does not matter when did you file for divorce,  if your divorce settlement was finalized by the court on or after January 1, 2019, the Tax Cuts and Jobs Act (TCJA) will have an impact on the taxation of alimony payments because the TCJA ended the tax deduction benefit and reporting requirements for support until at least 2025 (or, after 2025 until Congress changes the law.) Alimony payments whether for the spousal benefit or for the child support, will not be taxable in hands of the recipient and no deduction or credit for the paying spouse and no income reporting requirement for the recipient.<\/p>\n\n\n\n<p class=\"has-background\" style=\"background-color:#f8edc3\"><strong>Therefore, any alimony or separate maintenance payments made under a divorce or separation agreement which is executed on 1st January 2019 or later is fully tax-free in the hand of the recipient spouse. For this, fundamental change after 1st Jan 2019, the IRS no longer requires alimony recipients to declare the receipts as income.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_alimony_no_longer_deductible\"><\/span>Why is alimony no longer deductible?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-background\" style=\"background-color:#e4fbf2\">Alimony or separation payments made for any divorce settlement executed on 1st January 2019 or after, are not deductible as an expense while computing your taxable income. This is because of TCJA 2017 which eliminated Code \u00a7 71 that provided law for deduction of payments of alimony or separate maintenance payment\u201d.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_if_divorce_or_separation_agreement_modified_after_2018\"><\/span>What if divorce or separation agreement modified after 2018?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The new law applies to any  divorce settlement agreement executed in 2018, and modified after December 31, 2018, provides the  modification satisfies the following conditions:<\/p>\n\n\n\n<ul><li>Modifies  the terms and conditions of the alimony; and<\/li><li>The settlement agreement explicitly says that the alimony or separate maintenance payments are not deductible by the payer spouse or includable in the income of the receiving spouse.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_alimony_be_invested_in_IRAs\"><\/span>Can alimony be invested in IRAs? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This was one of the better tool of tax management before TCJA brought changes in law of taxation of alimony by repealing the whole section 71 of IRC. But now, the law restricts the investment of alimony receipts into an IRA. So alimony can not be reinvested by recipients on Individual Retirement Accounts (IRAs).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Do_I_need_to_report_alimony_on_tax_return\"><\/span>Do I need to report alimony on tax return?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Since TCJA made the receipt of alimony non-taxable, it should neither be counted for computing Gross Income nor for reporting purposes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_alimony_taxable_in_hands_of_a_non-resident_alien_spouse\"><\/span>Is alimony taxable in hands of a non-resident alien spouse?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The payments by a U.S. citizen spouse to a non-U.S. citizen ex-spouse is not only not taxable under Internal Revenue Code, but also there is no requirements for withholding tax on alimony payments to nonresident align ex-wife\/husband because the alimony is no longer treated as a U.S. source income in the hands of the non-U.S. payee ex-spouse. This point may affect many <a href=\"https:\/\/www.irstaxapp.com\/foreign-earned-income-exclusion\/\">us-expat<\/a>s in a positive way!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_spousal_support_taxable_in_California\"><\/span>Is spousal support taxable in California ?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After the the\u00a0<a href=\"https:\/\/www.irs.gov\/tax-reform\" target=\"_blank\" rel=\"noreferrer noopener\">Tax Cuts and Jobs Act (TCJA)<\/a>\u00a0abolished any federal income tax deduction for alimony payment , therefore taxing alimoney in the hand of recepient ,it became curious case that the state of California has a different rule about treat ment of alimony money.So, if you are a California state resident , you will have to declare the spousal support as taxable income in the State tax return and pay tax on it.<a href=\"https:\/\/www.ftb.ca.gov\/file\/personal\/income-types\/alimony.html#:~:text=In%20California%3A,income%20on%20your%20California%20return.\" target=\"_blank\" rel=\"noopener\">Read more on this <\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_alimony_taxable_in_New_York\"><\/span>Is alimony taxable in New York?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Alimony or separate maintenance payments<\/strong><\/p>\n\n\n\n<p>Similar to California , the state of New York also opted out of the TCJA as far as  the treatment of alimony or separate maintenance payments made under an alimony or separation agreement are concerned. The New York state  requires taxpayers to deduct the alimony or separate maintenance payments made in the tax year the payment of alimony was made. Similaraly , the recepient of <a href=\"https:\/\/www.divorcenet.com\/resources\/divorce\/spousal-support\/alimony-guidelines-new-york\" target=\"_blank\" rel=\"noopener\">alimony in New York<\/a>  must add  the alimony and support payments in the year of receipt and pay state personal income tax on it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alimony taxable or not must be hovering in the mind of persons who are considering or in process of separation. The simple answer to the said question is that there is no tax on receipt of alimony and likewise there is no allowance for deduction of alimony from your taxable income while filing taxes. Is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4504,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[54],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/4502"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=4502"}],"version-history":[{"count":3,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/4502\/revisions"}],"predecessor-version":[{"id":5722,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/4502\/revisions\/5722"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/4504"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=4502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=4502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=4502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}