In 2018 my spouse started drawing pension payments. Per his divorce agreement his ex-wife was entitled to half of his pension but would need to file a Qildro to receive her half, which she did not file until this year. We assumed she would never file, as they had been divorced for 25 years; unfortunately, this ended up in the courts and my spouse lost the suit. We just paid his ex-wife a large judgement for her half of the pension he drew from 2018 to 2023.
Question - because we already paid (a lot) of taxes on these pension receipts/payments, do we send her a 1099 for the cash settlement of her half, paid directly to her, as a result of the legal judgement? If so, which one? 1099R? 1099MISC?
We spoke to the IRS and they stated to report under "Alimony" on our taxes. Is that correct?
Any advice is greatly appreciated!
You do not send the ex any type of IRS Form for the alimony paid.
On your tax return you report the alimony paid, the Social Security number of the ex and the date of the original divorce or separation agreement.
This alimony payment and information is reported on IRS Form 1 Lines 19a, 19b and 19c. The alimony paid is an adjustment to income with the amount paid flowing to Form 1040 Line 10.
The ex is required to report the alimony received on their tax return. Failure to do so will result in the IRS sending a letter to the ex requesting payment of taxes on the alimony they failed to report on the return.
Thank you for your response!
Is this lump sum payment, as part of a court judgement for back pension payments considered alimony?
Yes it is.
Alimony refers to court-ordered payments awarded to a spouse or former spouse within a separation or divorce agreement. The reason for alimony is to provide financial support to the spouse who makes a lower income, or in some cases, no income at all.