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Is the Maintenance or Alimony I Receive Taxable Income?

When it comes to divorce, a common question is whether maintenance (also called alimony or spousal support) payments are taxable income. This can be a confusing topic, as the answer depends on several factors. To help clarify this issue, let’s take a look at what the tax implications of maintenance payments might be.

Generally speaking, determining whether your maintenance is taxable income boils down to two questions:

  1. What does the court order say?
  2. Was the maintenance order issued before or after December 31, 2018?

What does the court order say?

The first step is to review the court order. It is important to follow the exact directions of the court. If you are receiving maintenance and the tax implications are explicitly addressed in your divorce decree or agreement, then it will be handled according to that information.

Was the maintenance order issued before or after December 31, 2018?

Whether the maintenance order was issued before or after December 31, 2018, is crucial. Prior to the new tax law enacted in 2017 (the “Tax Cuts and Jobs Act”), maintenance received was typically considered taxable income and reported on tax returns as such. This applied to all divorces finalized prior to December 31, 2018, regardless of when the payments were received. Thus, any maintenance or alimony ordered before December 31, 2018, should still be reported on tax returns as taxable income.

However, under the 2017 law, any form of maintenance or alimony received after the date of enactment is no longer considered taxable income. This law applies to both new and existing divorces, so long as the divorce decree was modified after December 31, 2018, to reflect the new tax regulations.

In summary, tax implications of maintenance can be confusing, and the determination of whether it is taxable income depends on the specifics of the divorce decree. To ensure you understand your tax obligations, it is wise to consult with a qualified tax professional and/or family law attorney familiar with this topic. For more information about tax implications related to maintenance payments, contact the family law attorneys at Burnham Law.

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