How are alimony payments treated under current law?

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Multiple Choice

How are alimony payments treated under current law?

The tax treatment of alimony depends on when the divorce or separation agreement was signed. For agreements entered into after December 31, 2018, alimony payments are not deductible by the payer and are not included in the recipient’s income. In other words, there’s no tax break for the person paying alimony, and the recipient does not report the alimony as taxable income. For agreements that were in place before 2019, the old rules still apply: alimony is deductible by the payer and must be included as income by the recipient. This distinction is why the statement describing post-2018 agreements as neither deductible nor taxable, while noting pre-2019 agreements follow the old rules, is correct.

The tax treatment of alimony depends on when the divorce or separation agreement was signed. For agreements entered into after December 31, 2018, alimony payments are not deductible by the payer and are not included in the recipient’s income. In other words, there’s no tax break for the person paying alimony, and the recipient does not report the alimony as taxable income. For agreements that were in place before 2019, the old rules still apply: alimony is deductible by the payer and must be included as income by the recipient. This distinction is why the statement describing post-2018 agreements as neither deductible nor taxable, while noting pre-2019 agreements follow the old rules, is correct.

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