Ask a CPA

Generally, alimony payments are not taxable or deductible if you live in the same household as your divorced or legally separated spouse. But, if you are separated under a written agreement, but not legally separated under a decree of divorce or separate maintenance, then you may claim the deduction. Speak to a local CPA about this in greater detail.

Yes. Annulment decree payments qualify as deductible alimony payments. They also would be considered taxable income to the recipient. They should be reported as alimony (adjustment or income) on IRS Form 1040 page 1.

Generally, the wording in the divorce or separation decree identifies the payments as Alimony or something other than Alimony, such as child support. Alimony is income to the recipient and an adjustment to income for the payer. Generally, for payments to be considered alimony, seven characteristics should be present. The payments are in cash or check. The payment must be paid under a divorce decree or separation instrument. The divorce decree or separation agreement cannot designate the payment as a payment which is not deductible by the payer or includable in gross income by the recipient. The recipient and the payer must not be members of the same household. The payments must not be treated as child support. The taxpayer and spouse may not file a joint return with each other. There must not be a liability to make any payment for any period after the death of the spouse.

If you live in the same house as your ex-spouse and are legally separated or divorced, you cannot deduct your alimony payments, nor is your ex-wife required to report the alimony as income.

Yes. By mutual agreement one spouse can forego the deduction for alimony and the other spouse can receive the benefit of not being required to pay taxes on the alimony received.

No. There is no minimum payment period. Recapture of alimony amounts may apply where payments decrease by more than $15,000 within the first three years of the divorce.

The deductible alimony payments made in the first year or second year may have to be recaptured as income in the third year where the alimony payments within the first 3 years decrease by more than $15,000. Payments made in the second after the separation year are recaptured if the payments exceed the payments in the third post separation year by more than $15,000. Payments made in the first after the separation year are recaptured as income if they exceed the "average" payments made in the second post separation year and the third post separation year by more than $15,000. The recaptured amount is reported on IRS Form 1040 on the line Alimony received with a notation Alimony recapture with the payee spouse’s social security number.

When both alimony and child support are made together in a monthly payment, it is presumed that child support is paid first.
If your husband did not pay the full amount in a month or many months, then you need to pick up as income the difference over the child support amount for that month as alimony and income on your tax return.
It is reported on IRS Form 1040, page 1.

An Alimony trust is a formal trust arrangement where the beneficiary of the trust is the ex-spouse entitled to alimony payments.
The settler or person who contributes property to the trust is the ex-spouse obligated to make the alimony payments.
The taxpayer may establish a post death "testamentary" trust or a living "inter vivos" trust to provide for the alimony payments required by a divorce decree or an agreement between the parties.

There are many factors to clarify before you claim your child as a dependent. Generally a special rule favoring the custodial parent applies where divorced or separated parents together, provide more than half the child's support.
The custodial parent will meet the dependency support test even if she did not pay half the child's support.
The parents may arrange for the non-custodial parent to claim the child if IRS Form 8332 is signed by the custodial parent and supplied with the non-custodial parents tax return.
Form 8332 is a waiver of claiming the exemption and the exemption waiver can be used for that year only or for future years as well. Speak to your local CPA about the other criteria in claiming the child and about Form 8332.