Understanding the requirements to what qualifies as alimony

What are the tax consequences of Alimony and what qualifies as Alimony?

Alimony payments are deducted by the payer and included in income by the recipient.  The payer deducts alimony paid on Form 1040, line 31a.  The payer must also enter the recipient’s Social Security number on line 31b.  The recipient reports alimony received on Form 1040 line 11.

To Qualify as Alimony –

1.  Payments must be made in cash (includes checks and money orders)

2.  Payment must be required by a decree or written separation instrument

3.  The decree must not designate the payment as “not alimony”

4.  Spouses must not be a member of the same household

5.  Payment must not be treated as child support

6.  Payer’s liability to make payments must cease upon the death of the recipient

7.  Parties may not file a joint return

If you have a question regarding any of these matters, feel free to contact our Murfreesboro CPA team or our Lebanon CPA team with any comments or inquiries.