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Military Retirement Payments to Ex-Spouse

How do I claim military retirement cash payments made directly to my ex-spouse?  Is this reported as alimony, or as negative income somewhere else?

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Level 15

Military Retirement Payments to Ex-Spouse

Depending on to many circumstances to cover here, if DFAS is sending all or a portion of your RET pay to an ex-spouse by court order, then they will receive their own 1099-R.

If "you" set it up yourself for a portion of your retirement pay to be sent to your ex, then "you" pay taxes on all of it.

But if it's court ordered alimony you will deal with that later in the program, and nowhere in the retirement income section.

If it's child support you're paying, then it's flat out not deductible. Not a penny.

 

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Level 15

Military Retirement Payments to Ex-Spouse

Do you have a divorce or separation agreement finalized before 2019?

If you have court ordered support to your ex it would be alimony paid on your tax return.

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Level 15

Military Retirement Payments to Ex-Spouse

Depending on to many circumstances to cover here, if DFAS is sending all or a portion of your RET pay to an ex-spouse by court order, then they will receive their own 1099-R.

If "you" set it up yourself for a portion of your retirement pay to be sent to your ex, then "you" pay taxes on all of it.

But if it's court ordered alimony you will deal with that later in the program, and nowhere in the retirement income section.

If it's child support you're paying, then it's flat out not deductible. Not a penny.

 

View solution in original post

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Level 2

Military Retirement Payments to Ex-Spouse

I'm looking for the answer to this as well. Military retirement does not fall under QDROs but rather Military Pension Division Order. 

 

If your Alimony and Division of Marital Property are distinct according to your Separation Agreement or Divorce Decree or MPDO it should be deductible.

 

Since alimony is no longer deductible, you can't use that as a "shortcut" anymore.

 

And, lo and behold, TurboTax will flag negative income (even with an explanation) such that it won't allow an e-file.

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Expert Alumni

Military Retirement Payments to Ex-Spouse

Pensions are usually a part of the marital settlement and not deductible as alimony because the funds used to fund the pension were earned during the course of the marriage so in most cases they are not deductible.  

@hokietrax

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Level 2

Military Retirement Payments to Ex-Spouse

Caveat: I'm not a tax expert. 

 

But pension division for military retirees is handled a little different: "When the pension is divided in a written instrument and the payments end no later than the death of the payee, the military retirement payments are includable in the gross income of the payee and are excludable from the payor’s income." (https://familylawyermagazine.com/articles/taxes-and-military-pensions-the-long-and-short-of-it/)

 

Additionally, per Carla M from TurboTax's NC call center (who discussed with their military expert), the way to do this is to claim the pension payments as "Other Reportable Income" (not 'other Wages' as I previously thought). The description is "Military Retirement Pay to ex-spouse (xxx-xx-xxxx) per USFSPA" 

 

USFSPA is the Uniformed Services Former Spouse Protection Act 

 

Note: TurboTax flagged the negative number when listed under 'Other income not already reported on a Form W-2 or Form 1099' -- TT was fine when instead the same negative # was used under 'Other reportable income.'

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Expert Alumni

Military Retirement Payments to Ex-Spouse

The article you referenced says "How is this done? The payor’s payment may be entered as a negative number on the face of Form 1040 at Line 21 as “Other income,” and as a negative at Line 16a, “Pensions and annuities,” or at Line 31a, “Alimony paid” [11]. "

 

The method the TurboTax representative Carla M gave you was exactly as described as Other Income.  It was the substitute 1099-R that caused the error. 

 

@hokietrax

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Level 2

Military Retirement Payments to Ex-Spouse

There was no substitute 1099. The key point was the part I quoted. That article is from 2015, so things have changed, especially since alimony is no longer deductible. That was an easy way to do this before 2019. 

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