9099 / How are alimony payments taxed?

Prior to 2019, alimony and separate maintenance payments generally were taxable to the recipient and deductible from gross income by the payor (even if the payor did not itemize).¹ Alimony payments were deductible regardless of whether the payment was made from taxable income (i.e., the deduction was still allowed even if the payor used savings in order to make the payment).

The individuals could agree in the written divorce instrument or separation agreement that the alimony payments would be excludable by the recipient and nondeductible by the payor, and² a state court could also order this treatment.

Payments of arrearages from prior years were taxed to a cash basis taxpayer in the year of receipt.³ Furthermore, the Tenth Circuit Court of Appeals has held that an alimony arrearage paid to the estate of a former spouse was taxable as income in respect of a decedent.⁴

1. IRC §§ 71(a), 215(a).