Exspouse and military retirement pay

[Oliver7088]

Where does it state that a military retirement is a QDRO?

[Runin09]

Yes, I know it is community property and unfortunately reading my divorce decree again will not answer my question.  I believe my question was why am I paying taxes on it twice.  Thanks!

[hokietrax]

Is there anything more current, which distinguishes Alimony from Division of Marital Property (according to the MPDOs drawn up, they consider it a division of property)?

If managed through DFAS, 1099Rs are received on both sides, so both sides pay taxes only on their own portion, no deductions or adjustments necessary.

However, if DFAS does *not* manage it (because, for example, the 10/10 threshold is not met), one ex-spouse pays the other a portion of their retirement pay, but should be able to adjust income downward based on that amount, while the ex spouse pays taxes on the received money as income.  

[LeonardS]

Alimony is a periodic predetermined sum awarded to a spouse or former spouse following a separation or divorce.

A payment is alimony  if all the following requirements are met:

• The spouses don't file a joint return with each other;
• The payment is in cash (including checks or money orders);
• The payment is to or for a spouse or a former spouse made under a divorce or separation instrument;
• The spouses aren't members of the same household when the payment is made (This requirement applies only if the spouses are legally separated under a decree of divorce or of separate maintenance.);
• There's no liability to make the payment (in cash or property) after the death of the recipient spouse; and
• The payment isn't treated as child support or a property settlement. Ref: IRS Topic No. 452 Alimony and Separate Maintenance

Division of Marital properties is when the property that is jointly owned is are divided between the individuals. 

Generally, when one spouse transfers property to the other spouse as the result of a divorce, such transfers are generally treated as non-taxable events for U.S. federal income and gift taxes.

@hokietrax

[HelicopterMekanik]

I have a question that isn't related directly to taxes for a payment, but to registering with DFAS for automatic payments for the court ordered "26%". The order states exactly: "...wherein the parties have been married over 10 years during the military members credible military service, such that DFAS shall directly pay Wife her share of Husband's disposable military retired pay according to the following formula, to begin November 1, 2019. 

The former spouse is awarded 26 percentage of the member's disposable military retirement pay."

I have not been able to find a solid answer on this, but I am curious. What is the time limit for me to file with DFAS since the start date was in 2019? Is it too late to file, i.e. is there a deadline? I have paid her monthly (direct payments) and am caught up to date. Any help in answering this is greatly appreciated.

[DawnC]

She has to initiate it and there is no time limit.    In order to apply for direct payments under the USFSPA, a former spouse must submit a completed Application for Former Spouse Payments from Retired Pay (DD Form 2293), and a copy of the pertinent court order stating the former spouse’s award or awards that has been certified by the clerk of court.    A photocopy of the certified order is acceptable.   In order to complete the application, the former spouse may have to submit additional documentation for DFAS to determine whether all requirements, such as 10/10 or jurisdiction, were met.   The application must be sent to Garnishment Law Directorate at the Defense Finance Accounting Service (DFAS).   The application may be faxed to  877-622-5930 (toll-free) or sent by regular mail to:

DFAS-HGA/CL
Assistant General Counsel for Garnishment Law Directorate
P.O. Box 998002
Cleveland, OH 44199-8002.

From - How does a former spouse apply for direct payments under the USFSPA?

@HelicopterMekanik

[HelicopterMekanik]

Thank you for the reply, Dawn. I guess I am used to the government having limits and expiration requirements for, well everything! So my question is, 10 years from now after I have been faithfully paying her monthly she could then file? If that occurred, are the monthly payment since 2019 that I have paid counted? I've been docked before as a Soldier for "debts", so that worries me. Will the government then take it all at once or give me "no pay dues" until the debt they have in mind is satisfied? I appreciate greatly your response to my question, Dawn. Have a great day.

[AmyC]

1. Yes, she can file anytime.

2. You should have bank records where you are paying your ex.

3. They will just take her share from your paycheck.

If for some reason you decide to quit paying, then your spouse will surely fill out the paperwork pretty quickly to have it coming directly to her instead of through you. As long as she is happy with your payments, there is no reason to apply for direct payments under the USFSPA.

@HelicopterMekanik

[heylady25]

AL has income taxes, and they are like every other state with taxes; all income is taxable to the state.

[x999man]

I am seeking the same answer. Can I deduct as alimony, the 50% of my retirement pension paid to my ex, directly by DFAS, who pays both of us and gives us both our own 1099 R?

[VolvoGirl]

@x999man   No.  You are not paying it directly to her.  You are not getting taxed on it in the first place.  You already will have less income to be taxed on.  

[VolvoGirl]

@x999man   Read the answer posted previously by expert Marilyn....l

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.

[x999man]

However another expert states the opposite, Rosen states: "  If the pension payments are made directly by the retiree (or DFAS) to the spouse, are divided by a written instrument (such as a court order or settlement agreement) and end no later than the death of the retiree, then the payments are considered alimony." 

and another disagrees with the response you referenced: 

"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. "- 

So who and what is correct?

[VolvoGirl]

Depends if the amount shows up on your 1099R or the ex gets their own 1099R for it.  If she gets her own 1099R you can't deduct it.

[x999man]

Thank you. Looks like i cannot deduct it.