Alimony is taxable income to the recipient only if the divorce or separation agreement was executed on or before December 31, 2018. For any agreement finalized after that date, alimony is not taxable to the person receiving it and not deductible by the person paying it. The date that controls is when the divorce or separation instrument was signed, not when the payments are made.
The 2019 Cutoff
The Tax Cuts and Jobs Act of 2017 permanently repealed the federal tax rules that had governed alimony for decades. Before the change, the payer deducted alimony and the recipient reported it as income. For any divorce or separation agreement executed after December 31, 2018, that system no longer exists. The payer gets no deduction, and the recipient owes no federal income tax on the payments.1Internal Revenue Service. Divorce or Separation May Have an Effect on Taxes
Unlike many individual tax provisions in the same law that were set to expire after 2025, the alimony change is permanent. There is no scheduled sunset, so the rule applies to the 2026 tax year and beyond.
If Your Agreement Was Signed On or Before December 31, 2018
Older agreements are grandfathered. The payer still deducts alimony from income, and the recipient still reports it as taxable income.2Internal Revenue Service. Publication 504 – Divorced or Separated Individuals The grandfathering continues indefinitely, so recipients under pre-2019 orders keep owing tax on alimony they receive.
A pre-2019 agreement can lose its grandfathered status in one situation. If the agreement is modified after December 31, 2018, and the modification expressly states that alimony payments are no longer deductible by the payer or includible in the recipient’s income, the new post-2018 rules take over.1Internal Revenue Service. Divorce or Separation May Have an Effect on Taxes Both parts matter. The modification has to change the payment terms, and it has to include specific language adopting the new tax treatment. A modification that only adjusts the payment amount, with no such language, leaves the old rules in place.
This opt-in structure can cut either way. When the recipient earns significantly less than the payer, keeping the old rules often benefits both sides because the payer’s deduction is worth more than the recipient’s tax bill. In other cases, switching simplifies matters and may benefit the recipient. It’s worth running the numbers with a tax professional before anyone signs a modification.
What Actually Counts as Alimony
For pre-2019 agreements, where the tax treatment still matters, the IRS treats a payment as deductible alimony only if it meets every one of the following:
- The payment is made in cash, check, or money order. Property transfers and services do not qualify.
- The payment is required by a divorce decree, written separation agreement, or court order. Voluntary payments outside a written instrument are not alimony, even if both spouses call them that.
- The instrument does not designate the payment as something other than alimony.
- Spouses who are legally separated under a divorce or separate maintenance decree are not members of the same household when the payment is made.
- There is no requirement to continue payments after the recipient dies, and no obligation to substitute other payments after that point.
- The payment is not treated as child support or as part of a property settlement.
Each payment is tested on its own. One failed criterion knocks the payment out of alimony treatment for federal tax purposes, no matter what the divorce agreement labels it.2Internal Revenue Service. Publication 504 – Divorced or Separated Individuals
For post-2018 agreements, this checklist has no tax effect. Alimony carries no federal tax consequences either way.
Payments That Are Never Alimony
Child Support
Child support is never deductible by the payer and never taxable to the recipient, regardless of when the agreement was signed.3Internal Revenue Service. Alimony, Child Support, Court Awards, Damages The IRS also looks for alimony that is really disguised child support. If a payment labeled as alimony is reduced or ends when a child reaches a specific age, graduates, or hits another milestone, the IRS can reclassify part or all of it. If the reduction falls within six months before or after a child turns 18, 21, or reaches the local age of majority, the IRS presumes it was tied to the child.
Property Transfers
Dividing property in a divorce is generally not a taxable event. No gain or loss is recognized when property is transferred between spouses or former spouses if the transfer is incident to the divorce, and the receiving spouse takes over the transferor’s tax basis. Taxes are deferred until the property is later sold.4Office of the Law Revision Counsel. 26 U.S. Code 1041 – Transfers of Property Between Spouses or Incident to Divorce A transfer qualifies as incident to the divorce if it happens within one year of the marriage ending or is related to the end of the marriage. Rent or other payments for the use of a former spouse’s property are also not alimony.
How to Report It
If your agreement was executed after December 31, 2018, there is nothing to report. Alimony does not appear on either party’s federal tax return.
If your agreement was executed on or before December 31, 2018, the payer reports deductible alimony on Schedule 1 (Form 1040), line 19a. Line 19b requires the recipient’s Social Security number or ITIN, and line 19c requires the month and year of the original divorce or separation agreement. The recipient reports taxable alimony on Schedule 1 (Form 1040), line 2a, with the date of the original agreement on line 2b.2Internal Revenue Service. Publication 504 – Divorced or Separated Individuals
Both sides face a $50 penalty for failing to provide the recipient’s Social Security number. The payer’s deduction can be disallowed entirely if the number is missing, and the recipient can be penalized for refusing to provide it.5Internal Revenue Service. Topic No. 452, Alimony and Separate Maintenance If a former spouse refuses to hand over the number, the penalty hits both parties, but the payer’s lost deduction is usually worth far more than $50.
Your State May Tax Alimony Differently
Not every state adopted the federal change. Some states still let the payer deduct alimony and require the recipient to report it as income, even for post-2018 agreements. Others follow the federal treatment exactly. Because each state sets its own conformity rules, your state return may treat alimony differently than your federal return. If you live in a state with an income tax, check your state’s current rules or ask a tax professional before you file.