Alimony, which the Internal Revenue Code calls an alimony or separate maintenance payment (26 U.S.C. 152(d)(5)(B)), is a payment to or for a spouse or former spouse under a divorce or separation instrument, and it does not include voluntary payments that are not made under a divorce or separation instrument (IRS, Publication 504, Divorced or Separated Individuals). Whether it is deductible by the payer and taxable to the recipient turns on one fact that never changes again once it happens: the date the instrument was executed.
The Deduction Was Repealed, Not Suspended
The Tax Cuts and Jobs Act struck the provisions rather than pausing them. Part VII of subchapter B was amended by striking section 215, the payer’s deduction, and part II of subchapter B of chapter 1 was amended by striking section 71, which had put alimony into the recipient’s gross income (Public Law 115-97, section 11051(a) and (b)(1)(B)). Paragraph (8) of section 61(a), the gross income listing for alimony, was struck in the same subsection, and the remaining paragraphs were redesignated (Public Law 115-97, section 11051(b)(1)(A)).
That section carries no expiration provision of its own, and its rule runs off the date an instrument was executed rather than off a taxable year (Public Law 115-97, section 11051). A pre-2019 instrument that is never modified therefore keeps the old treatment, and a post-2018 instrument never acquires it.
The Execution Date Test Has Two Limbs
Both limbs sit in one sentence of the transition rule, and the second one is the one that gets read short.
The amendments made by that section apply to any divorce or separation instrument, as defined in section 71(b)(2) of the Internal Revenue Code of 1986 as in effect before the date of the enactment of that Act, executed after December 31, 2018, and to any divorce or separation instrument, as so defined, executed on or before that date and modified after that date if the modification expressly provides that the amendments made by that section apply to such modification (Public Law 115-97, section 11051(c)).
Read the second limb as the two conditions it is. The instrument has to be modified after that date, and the modification has to expressly provide that the repeal applies to it. A modification that is silent on the point satisfies the first condition and fails the second, so the old treatment survives it. The IRS states the same rule from the payer’s side: the payer cannot deduct payments made under an agreement executed after 2018, or executed before 2019 but later modified if the modification expressly states that the repeal of the deduction for alimony payments applies to the modification (IRS, Topic no. 452, Alimony and separate maintenance).
Note also which definition the transition rule reaches for. It defines the instrument by section 71(b)(2) as that section stood before enactment, which is the definition the same Act repealed, so the repealed text still does work in deciding which instruments the repeal applies to (Public Law 115-97, section 11051(c)).
Where the test lands on the post-2018 side, both halves of the old treatment go at once. Amounts paid as alimony or separate maintenance payments under a divorce or separation instrument executed after 2018 are not deductible by the payer, and those amounts are also not includible in the income of the recipient (IRS, Publication 504).
What Makes a Payment Alimony
A payment is alimony or separate maintenance for federal tax purposes if all of the following requirements are met: the spouses do not file a joint return with each other; the payment is in cash, including checks or money orders; the payment is to or for a spouse or a former spouse made under a divorce or separation instrument; the spouses are not members of the same household when the payment is made, which applies only if the spouses are legally separated under a decree of divorce or of separate maintenance; there is no liability to make the payment, in cash or property, after the death of the recipient spouse; the payment is not treated as child support or a property settlement; and the divorce or separation agreement does not designate the payment as not includable in gross income of the payee spouse and not allowable as a deduction to the payer spouse (IRS, Topic no. 452).
The same-household condition is the one most often overstated. It applies only where the spouses are legally separated under a decree of divorce or of separate maintenance, so it is not a general rule that cohabiting spouses can never pay alimony (IRS, Topic no. 452).
The Statutory Definition Survived, in a Place Nobody Looks
Striking section 71 removed the general definition, but the phrase still has a statutory meaning inside the dependency rules, and the scope words on it matter as much as the test does.
For purposes of subparagraph (A) of that paragraph, the term alimony or separate maintenance payment means any payment in cash if such payment is received by, or on behalf of, a spouse under a divorce or separation instrument as defined in section 121(d)(3)(C); if, in the case of an individual legally separated from the individual’s spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made; and if there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment, in cash or property, as a substitute for such payments after the death of the payee spouse (26 U.S.C. 152(d)(5)(B)).
Because that definition is written for purposes of subparagraph (A), it governs the support question it sits in rather than the Code at large. What it decides there is that, for purposes of that subsection, payments to a spouse of alimony or separate maintenance payments are not treated as a payment by the payor spouse for the support of any dependent (26 U.S.C. 152(d)(5)(A)), which is why an alimony payment does not help the payer meet a support test in dependents.
The instrument definition it points at carries its own scope words. For purposes of that paragraph, a divorce or separation instrument means a decree of divorce or separate maintenance or a written instrument incident to such a decree, a written separation agreement, or a decree not described in the first clause requiring a spouse to make payments for the support or maintenance of the other spouse (26 U.S.C. 121(d)(3)(C)). Three shapes qualify, and an informal arrangement between the spouses is none of them.
What Is Never Alimony
Not everything paid under a divorce or separation instrument is alimony. The category excludes child support, noncash property settlements whether in a lump sum or in installments, payments that are the spouse’s part of community property income, payments to keep up the payer’s property, use of the payer’s property, and voluntary payments, meaning payments not required by a divorce or separation instrument (IRS, Topic no. 452).
Child support carries an ordering rule that decides what a short payment was. Child support is never deductible and is not considered income, and where an instrument provides for both alimony and child support and the payer pays less than the total required, the payments apply to child support first, with only the remaining amount considered alimony (IRS, Topic no. 452). A payer who underpays does not get to choose which obligation the shortfall lands on.
Recapture Still Reaches Instruments Executed Before 2019
Where the old treatment survives, so does the rule that claws it back. If alimony payments decrease or end during the first 3 calendar years, the payer may be subject to the recapture rule, which means including in income in the third year part of the alimony previously deducted, while the recipient deducts in the third year part of what they previously included in income (IRS, Publication 504).
The trigger has two alternative limbs and either one is enough. The payer is subject to the recapture rule in the third year if the alimony paid in the third year decreases by more than $15,000 from the second year, or if the alimony paid in the second and third years decreases significantly from the alimony paid in the first year (IRS, Publication 504).
The clock is defined too. The 3-year period starts with the first calendar year a payment qualifying as alimony is made under a decree of divorce or separate maintenance or a written separation agreement, time in which payments were being made under temporary support orders is not included, and the second and third years are the next 2 calendar years whether or not payments are made in them (IRS, Publication 504).
Reasons for a decrease that can require recapture include a change in the divorce or separation instrument, a failure to make timely payments, a reduction in the payer’s ability to provide support, or a reduction in the spouse’s support needs (IRS, Publication 504).
Three kinds of amount are left out of the decrease itself, and they are what stops the rule reaching a payment that was never really reduced. In figuring a decrease in alimony, do not include payments made under a temporary support order, payments required over a period of at least 3 calendar years that vary because they are a fixed part of income from a business or property or from compensation for employment or self-employment, or payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year (IRS, Publication 504).
A recapture amount is reported on the same two lines the payments used, with the labels corrected. An amount included in income goes on Schedule 1 (Form 1040), line 2a, with received crossed out and recapture entered, and an amount deducted goes on Schedule 1 (Form 1040), line 19a, with paid crossed out and recapture entered (IRS, Publication 504).
Where a Still-Deductible Payment Is Reported
A payer of taxable alimony deducts it whether or not they itemize, on Form 1040 or Form 1040-SR with Schedule 1, Additional Income and Adjustments to Income, attached (IRS, Topic no. 452). That line sits among the other adjustments described in above the line deductions.
Both sides carry an identification requirement with a penalty attached. The payer must enter the Social Security number or individual taxpayer identification number of the spouse or former spouse receiving the payments, or the deduction may be disallowed and a $50 penalty may apply; the recipient must provide their number to the payer, or may have to pay a $50 penalty (IRS, Topic no. 452). A recipient of taxable alimony reports it on Form 1040 or Form 1040-SR with Schedule 1, or on Form 1040-NR with Schedule NEC (IRS, Topic no. 452), and it is one of the receipts treated as unearned income.
Common Questions
Only under an older instrument. Payments under an instrument executed after 2018, and under a pre-2019 instrument modified after 2018 where the modification expressly says the repeal applies, are not includible in the recipient’s income (IRS, Publication 504). Under any other pre-2019 instrument the recipient still includes it.
Only where the instrument was executed before 2019 and has not been modified after 2018 in a way that expressly adopts the repeal (IRS, Topic no. 452). The deduction itself no longer exists in the Code, because section 215 was struck (Public Law 115-97, section 11051(a)); what survives is its application to the older instruments the transition rule leaves alone.
Not by itself. The modification has to expressly provide that the amendments apply to it, so a post-2018 modification that says nothing about the point leaves the old treatment in place (Public Law 115-97, section 11051(c)). Whether a client wants that outcome is a drafting decision made before the modification is signed, not a filing position taken afterward.
No, in both directions. Child support is never deductible and is not considered income, and a payment treated as child support fails the alimony requirements outright (IRS, Topic no. 452).
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