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sarahgong77
Level 1

Alimony taxability

The new law on alimony taxability effective 1/1/2019 said divorce finalized after 1/1/2019 are not deductible to the payer and not taxable to the recipient. I'm the recipient of alimony, I have been receiving alimony and paying tax on it, but my case is not finalized yet.  What if my case will be finalized in the middle of 2021?  Will I still need to pay tax on alimony before the final settlement date, or as long as the final settlement date is within 2021, I don't need to pay tax on alimony for the year of 2021?

 

Thank you!

3 Replies
szie21707
Level 3

Alimony taxability

You should not have to report or include alimony as taxable income on the Federal level. However, if you reside in California your alimony is taxable since they do not conform to the Federal Law.

sarahgong77
Level 1

Alimony taxability

Oh I didn't know California is different, thanks a lot!  However, I still want to know if the final settlement date would split the year, say if my case is finalized on 4/30/2021, at federal level, do I still need to pay tax on alimony for Jan - Apr 2021, and starting from May 2021 and forward, I don't need to pay tax on alimony?  Or the taxability is counted by year, doesn't matter which date my case is finalized, as long as it's within 2021, I don't need to pay tax on alimony for the year of 2021? 

szie21707
Level 3

Alimony taxability

You do not include alimony as taxable income.

 

"The Tax Cuts and Jobs Act enacted new tax rules regarding spousal support payments, also known as alimony. In divorces finalized after January 1, 2019, the person paying spousal support can no longer deduct the amount from their taxes. For recipients, spousal support payments are no longer considered taxable income."

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