Your share of your ex-husband's military retirement is considered alimony, deductible by him and reportable by you.
If DFAS pays you directly and sends you a Form 1099-R, you report that amount on your tax return (in Retirement Plans > Pension Plans (1099-R).
If he pays you directly, report it under Alimony Received interview, under Less Common Income.
In 2008, the Tax Court recently ruled that a taxpayer’s payments to an ex-spouse under the Uniform Services Former Spouse Protection Act (USFSPA) representing her share of his military retirement pay were deductible alimony payments. - See more at: http://www.journalofaccountancy.com/issues/2008/jan/pensionisalimony.html#sthash.FvXKK2gK.dpuf
Can you confirm that this is, indeed, current information. My understanding is that this IRC was repealed.
I have always claimed my alimony as retirement income - pension distribution from a qualified plan. Is this in error? Can't seem to find a clear answer on the recipient side. I know I need to report it yet I am wondering if I unknowingly am paying a 10% penalty for early withdrawal!
Military retirement pension is a non-qualified plan. You can check your past tax returns for any "other taxes." You would have a form 5329 "Additional Tax on Retirement Distribution." You could also check on line 6 of schedule 2.
Hello,
I receive monthly community property payments directly from DFAS from my divorce, of which I have them take out taxes before I receive payment. Please help me to understand why then am I paying taxes on it a second time when I report it when filing taxes. How do I stop having to pay taxes on it twice?
Thanks!
You will not be paying taxes on the income twice. You report on your tax return all income including the 1099-R you should have received for the retirement income. On that 1099-R you will see and subsequently enter in TurboTax, any taxes that were withheld so that you get credit for those payments. At the end, if you have paid more than your tax liability, you will get a refund. If you have not paid in enough you will owe a tax payment by 15 Apr 2020.
What if the divorce decree states that the pension is not to be considered alimony?
The divorce decree states pension is to be considered an asset acquired during the marriage
Is The former spouse of a military veterans portion of his retirement pay considered alimony? I get 17% and it is court-ordered in the state of California
Do you get your own 1099R for it? Whether it's Alimony or considered pension it is taxable either way. You just enter the 1099R under Retirement not Alimony. My friend gets both from her ex in California. She gets part of his Military retirement and enters the 1099R plus he pays her Alimony each month.
In regards to this question... what if there is a Survivor Benefit Plan (SBP) election? Also, we receive a 1099R. The new tax rules treat alimony differently after 2018. Is it no longer retirement pay?
Does this still hold true for 2020 tax purposes? I retired from the military last year and paid my ex-wife (with a personal check) for 6 months of her portion of the military retirement. The military caught up and paid her via direct deposit for the other 6 months. My 1099R shows me getting ALL of the retirement income and paying ALL of the taxes. Is there a way I can deduct her portion from my gross distribution and recoupe the taxes I paid on her portion of the retirement?
No. Tax law used to be that alimony was deductible by the payer. If your divorce was before the laws changed, you are grandfathered in . If you got divorced 2019 or later, then alimony is not deductible to you.
See IRS Topic No. 452 Alimony and Separate Maintenance for complete details.
If the payments were not alimony, your divorce decree would have to be pretty specific with what it is and tax consequences.
Thank you for the reply. I was divorced in 2017. I retired on 1 Jan 2020 and the QDRO was updated (amended) in June 2020. Am I still grandfathered in? The amendment does not state anything about "alimony".
If the modification did not expressly state that the repeal of the deduction for alimony payments applies to the modification, you are still grandfathered in. You can deduct the payments as alimony. [IRS Topic No. 452 Alimony and Separate Maintenance]
My divorce decree is dated Dec 1995. In regards to military retirement distribution my decree says " Pursuant to the above formula, Plaintiff's portion of Defendant's retirement would equal $938.00 per month." That is all it says and that is the only mention of the division of my military retirement pay in the document. DFAS deducts that amount from my monthly retirement pay direct deposit and sends it to my ex-spouse. I don't see that money but pay the income taxes on that $938 per month. Can the $938 be deducted as alimony or some other line item?
Normally you are not paying the taxes on those payments. Your 1099R would only include the amount you received, while you ex-spouse gets a 1099R showing the amount they receive. You should contact DFAS to confirm.
Here is a link with DFAS contact information in the upper left column. Also note the answer to the question, "Are USFSPA retired pay as property payments taxable to the former spouse?"
I recieve a pension of my 2007 divorce under 20/20/20 rule, ex-spouse military pension as direct garnishment from DFAS, & recieve a 1099R ,I've had my federal taxes withheld from it. I recieved a separate alimony for 24 mionths then it ended. I recently moved to a state with state tax. AL. Is my part of pension I recieve, also subject to state taxes as well? I have not been able clarify, any clear guidance, concerning this online, whether the pension I recieve is liable to state taxes as well? IWe were divorced in Texas, Im not sure if is was considered property settlement or alimony. I want to be confident II have the correct tax advice now & time to make any correction, so I might sleep soundly, instead of suffering consequences later.
Shouldn't this be added after the second sentence in ToddL's reply: If DFAS pays you directly and sends you a Form 1099-R, you report that amount on your tax return (in Retirement Plans > Pension Plans (1099-R). When DFAS pays you directly, he cannot deduct the payments as alimony because they are not included in the "Gross Distribution" shown on his 1099-R.
Thoughts??
For divorce decrees finalized after 2018, alimony is no longer deductible.
If the divorce decree was finalized prior to then, and this payment is coming as a result, you still would not be able to deduct it as alimony as you are not including the disbursement that is being paid out in your income. You would be getting an extra deduction without the matching income.
That last sentence is important as written. I have been searching all over and find varying answers. If the "alimony" is not on my 1099-R, I can't claim it? I retired from the military in 2007.
After you report the income on your 1099-R, then you claim the Alimony Deduction to offset the income on your return.
If the alimony you paid is NOT included in your 1099-R distribution amount (your ex-spouse receives their own 1099-R), then you can't take the deduction. You should contact the payer if you're not sure about this. If you paid alimony yourself, here's the steps to enter it in TurboTax:
Please see the following FAQ article for additional information Alimony Paid.
I'm in the same situation for 2021 and I am very interested in a response to this question. I've talked with a local tax preparer and searched the internet but cannot get an answer. Essentially, my ex spouse received the full benefit for 12 months without having to be pay taxes on the amount received. Divorce was final in 2020 and DFAS is just now starting to pay her directly in March 2022.