Is Alimony taxed as income to the recipient and deductible to the person paying?

The tax treatment of alimony payments is determined by federal law (the Internal Revenue Code), not by state law. Several factors must be present to enable the person paying alimony (the payor) to deduct the payments on his or her tax return (and, conversely, to require the recipient to report it as income on his or her tax return). The requirements are:

  • The payments must be in the form of a check, cash or some equivalent. Transfers of property do not qualify.
  • The payments must be made pursuant to a written document – either a court order or a written agreement. Verbal agreements or understandings do not qualify.
  • In the agreement, the payments are not designated as nondeductible by the payor and non-includable in the recipient’s income).
  • The recipient and the payor cannot occupy the same household.
  • The payments must end upon the death of the recipient (note, there is no similar requirement that the payments end upon the death of the payor).
  • The payments are not designated as child support and are not otherwise “disguised” child support payments (in other words, if there are express contingencies that make it appear that the payments are in fact child support payments, they are not considered alimony).
  • The payor and recipient cannot file joint tax returns

As with any other issues arising from your separation or divorce, you should discuss these issues with a North Carolina Family Law Specialist. Feel free to contact me, Monty Beck, Western North Carolina Family Law Specialist to discuss these issues.

Coward, Hicks & Siler, PA, is a general practice law firm, whose lawyers are authorized and licensed to provide legal services in the State of North Carolina. We serve clients throughout western state, in Franklin, Sylva, Murphy, Cherokee, Bryson City, Waynesville, Highlands, Cashiers, Cullowhee, Robinsonville, Brevard, Asheville and surrounding townships.

The main content of this site is updated as necessary to ensure accuracy. Blog posts are accurate as of the date of publication and are updated with new posts in the event of changes in the law. All material found on this website is primarily intended for the purpose of marketing, and to allow visitors to compare the services offered by Coward, Hicks & Siler with those offered by similar law firms.

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    705 W. Main Street
    Sylva, NC 28779
    Phone: 828-586-2147
    Facsimile: 828-586-2605

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    211 Cashiers School Road
    P.O. Box 1918
    Cashiers, NC 28717
    Phone: 828-743-2401
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    43 West Main Street
    Franklin, NC 28734
    Phone: ]828-524-6475
    Facsimile: 828-524-9833