How Alimony Is Taxed and Who Pays the Tax Bill

Alimony received is taxable income to the person who gets it; the person who pays it can deduct it from their own income

If you receive alimony, you report it as income on your federal tax return and pay income tax on it at your ordinary tax rate. If you pay alimony, you can deduct those payments from your income, which lowers the amount of income you owe tax on. This tax treatment applies to alimony ordered by a court or spelled out in a written separation agreement.

The tax rules changed for alimony orders signed after December 31, 2018. For those newer orders, alimony is no longer deductible by the payer and no longer taxable to the recipient. For orders signed before that date, the old rules still explore unless both parties agree in writing to switch to the new treatment.

The IRS does not automatically know you are receiving or paying alimony. You must report it correctly on your tax return, and the person paying it should report your tax identification number (usually your Social Security number) to the IRS on Form 1040, Schedule 1.

Key Takeaways

• Alimony received before 2019 is taxable income to you; alimony paid before 2019 is deductible by the payer.
• Alimony ordered or agreed to after December 31, 2018 is not taxable to the recipient and not deductible by the payer.
• You must report alimony income on your federal tax return even if no one sends you a tax form.
• The payer should provide your Social Security number to the IRS so the agency can match payments to your tax return.
• State income tax treatment of alimony varies by state and does not always match the federal rule.

How the tax rule changed in 2019

The Tax Cuts and Jobs Act, signed into law in December 2017, changed the federal tax treatment of alimony for orders and agreements signed after December 31, 2018. Before that date, alimony was deductible by the payer and taxable to the recipient — a system that had been in place since 1942. Starting in 2019, alimony became non-deductible and non-taxable.

This change affects only new orders and agreements. If your alimony order or separation agreement was signed before January 1, 2019, the old tax rules explore to you unless you and the other party both sign a written agreement to change to the new treatment. That written agreement must state that you are choosing to have the new rules explore instead of the old ones.

If you are unsure when your order was signed, check the document itself — the judge's signature or both parties' signatures will show the date. If you have a separation agreement rather than a court order, the date you both signed it is what matters.

What you report if you receive alimony ordered before 2019

Alimony you receive counts as ordinary income. You report the total amount you received during the tax year on Form 1040, Schedule 1, line 2a. You then include that amount in your total income, which determines what tax bracket you fall into and what you owe.

You cannot reduce this income by claiming it as a deduction elsewhere on your return. Unlike some types of income, there is no special deduction or exclusion for alimony. If you received $20,000 in alimony during the year, you report the full $20,000 as income.

The person paying you should send you a Form 1098-T or a written statement showing the amount paid during the year. However, the IRS does not require this form for alimony — it is optional. Even if you do not receive a form, you must still report the income you actually received.

What you deduct if you pay alimony ordered before 2019

If you paid alimony under an order or agreement signed before 2019, you can deduct those payments on Form 1040, Schedule 1, line 2b. This deduction reduces your taxable income dollar-for-dollar, which can lower your tax bill significantly.

You deduct the actual amount you paid during the tax year, not the amount you were ordered to pay. If you were ordered to pay $2,000 per month but paid only $18,000 during the year (perhaps because you started paying partway through), you deduct $18,000. If you paid more than ordered — for example, by making a lump-sum payment — you deduct what you actually paid.

You must provide the recipient's tax identification number (usually their Social Security number) to the IRS on your return. If you do not have it, you can ask the recipient directly or contact your state's child support enforcement agency if the alimony is part of a child support order. Providing the wrong number or no number can result in the IRS disallowing your deduction.

Alimony ordered or agreed to after December 31, 2018

For alimony under orders or agreements signed on or after January 1, 2019, neither the payer nor the recipient reports alimony on their federal tax return. The recipient does not include it in income, and the payer cannot deduct it. From a federal tax perspective, the money changes hands but does not affect either person's tax bill.

This rule applies even if the order or agreement was modified after 2018. If your original order was from 2015 but you modified it in 2020, the new rule applies to payments made after the modification date.

Some states have not adopted this federal change and still tax alimony under the old rules, even for orders signed after 2018. Check your state's tax agency website or speak with a tax professional in your state to learn what your state requires.

State income tax treatment of alimony

Most states follow the federal tax rule, but not all. Some states still tax alimony under the old system (taxable to recipient, deductible by payer) even for orders signed after 2018. A few states do not tax alimony at all, regardless of when the order was signed.

Your state's treatment does not depend on where the alimony order was issued — it depends on where you live for tax purposes. If you live in a state that taxes alimony, you report it on your state return even if the federal rule says it is not taxable. If you live in a state that does not tax alimony, you do not report it on your state return even if the federal rule says it is taxable.

Because state rules vary, you should check your state's tax agency website or consult a tax professional in your state before filing. Reporting alimony incorrectly on your state return can trigger an audit or penalty.

How to report alimony if you are unsure of the order date

If you cannot find your alimony order or separation agreement, contact the court that issued the order or the attorney who drafted the agreement. The court clerk can provide a certified copy of the order with the signature date clearly shown. If you have a separation agreement, ask the other party or your attorney for a copy.

If you have already filed a return and reported alimony incorrectly, you can file an amended return using Form 1040-X. You have generally three years from the original due date to file an amended return and claim a refund, though some situations allow longer.

If the other party is not reporting the alimony correctly on their return, you can report this to the IRS using Form 3115 or by calling the IRS at 1-800-829-1040. However, the IRS will not force the other party to comply — you can only report what you received or paid.

Frequently Asked Questions

Do I have to report alimony if I receive it in cash?

Yes. The tax rule applies to alimony no matter how it is paid — cash, check, bank transfer, or any other method. You must report the full amount you received during the year, whether or not the other party reports it to the IRS.

What if my alimony order says it is not taxable?

The language in your order does not override federal tax law. If the order was signed before 2019, alimony is taxable to you and deductible by the payer under federal law, regardless of what the order says. If the order was signed after 2018, it is not taxable or deductible under federal law. Your state may have different rules.

Can I deduct alimony I paid if the order was signed in 2019?

No. Orders signed on or after January 1, 2019 are not deductible. If your order was signed on December 31, 2018, it is deductible; if it was signed on January 1, 2019, it is not. The exact date matters.

What happens if I do not report alimony income?

The IRS may discover the unreported income if the payer reports your Social Security number on their return. This can trigger an audit, and you may owe back taxes, interest, and penalties. It is safer to report the income correctly on your return.

Does alimony affect my tax credits or deductions?

Yes, if you receive alimony under a pre-2019 order. Alimony income counts toward your total income, which can affect whether you may have access to for credits like the Earned Income Tax Credit or the Child Tax Credit, and it can reduce the amount of certain deductions you can claim. Consult a tax professional about how your specific situation is affected.