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Requirements for tax-deductible alimony payments

If your divorce agreement requires you to pay alimony to your ex-spouse, one good piece of news is that it's likely tax deductible for you. However, the Internal Revenue Service (IRS) has specific requirements for alimony payments to be deductible.

These requirements are fairly straightforward and haven't changed in some time. However, there's still confusion for too many people.

Following are the requirements for being able to deduct alimony. Note that they do not apply to child support payments, which are not tax deductible. That's one reason why the two payments should always be kept separate.

  • You and your ex cannot be living together or file a joint tax return.
  • The payments must be made in the form of cash or a cash equivalent (such as a check or money order).
  • The payments have to be made either directly to your ex or on behalf of him or her. If they are made to third parties such as an attorney or creditor (like a mortgage lender), that must be stipulated by your ex in writing or be stated in the separation or divorce agreement.
  • The alimony payments must be designated as such in the separation or divorce agreement.
  • Your alimony is ordered to stop if your ex dies.

You must provide your ex's Social Security number on your tax return, or you'll be charged a penalty. It's essential that your ex correctly report the amount of alimony received on his or her tax return. Therefore, it's essential for both of you to be clear on what the alimony payments are and not commingle them with any other money, gifts or support you may provide your ex.

Your Rhode Island family law attorney can provide additional guidance and help you avoid any potentially costly confusion.

Source: MarketWatch, "How to make your alimony payments tax-deductible," Bill Bischoff, accessed Nov. 02, 2017

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