@heartgems68 wrote:
Hi Opus 17 (Level 15),
The 8% is what the OPM withheld from my annuity payments.
So, it would seem the consensus is I do not need to file Form 1099R; however, my income for 2024 has decreased by $8,029 while my ex-spouse's has increased by that same amount. How do I go about claiming that loss? My divorce attorney has affirmed that it cannot be categorized as alimony.
I anxiously await your response/guidance!
If I understand your objection, your income is decreased because the judge ordered that it never should have been your income in the first place.
If OPM had made the adjustment correctly, you would have received $10,000 less from OPM, and paid $2200 less in taxes, resulting in a net loss to you of $7800, as a result of the spousal support order (apparently, your spouse is entitled to part of your retirement because you accrued these retirement credits while you were married).
One way to fix this would be, you send $10,000 cash to OPM, OPM sends $10,000 cash to your ex, OPM issues a 1099-R to your spouse, and a corrected 1099-R to you. That complicated, and OPM would probably refuse (its a funny thing, but a government agency can sometimes ignore orders from other government departments).
So the other fix is, you got all the income and paid all the tax, so you send the net after-tax amount ($7800) to your ex. You and your ex are in the same financial position you would have been in, if OPM had split the pension payment correctly in the first place. You can't deduct anything because either this is "not alimony" per the terms of your divorce, or the divorce was finalized after 2019 when alimony is no longer deductible even if it was alimony. But you net the same in the end as if OPM had split the payment correctly.
