Tax Consequences of Alimony

As Defined in Section 71 of the U.S. Internal Revenue Code, it is mandatory that alimony (spousal support) is included in the recipient’s gross income. On the other hand, the payer is able to exclude it from gross income. In order for the payments made to qualify as alimony, the following must be met:

- Must be in a form of cash payment (cash, check, money order)
- The payment is made and received as a result of a divorce or other separation instrument
- The separation instrument does not specifically mention that the payments are for alimony
- Both the person receiving and paying the alimony payments are living in the same household
- In the event that the recipient dies, there is no liability to make payments