Hello,
I have a question, hopefully someone can help me out. My original divorce decree is dated 2017. So I have to pay taxes on my alimony. My question is, we had a modification on the alimony amount dated 2021. I still have to pay taxes on my alimony, because that was not modified. But when plugging in my alimony amount, on the first line, I used the total amount a got for 2021 at the old alimony amount, then on the next line, I put the alimony amount given as of the modification in 2021. This is only 150.00 less a month then previous.
The federal return part changes drastically, without checking the "modify box" I go from paying taxes to getting money back way more then what I usually pay. What am I doing wrong?
If your divorce or separate maintenance agreement was executed before December 31, 2018, Yes you have to report the income and your ex-spouse would be able to deduct the alimony payment. The law on alimony or separate maintenance changed on December 31, 2018. Below is a synopsis of the change:
Beginning Jan. 1, 2019, alimony or separate maintenance payments are not deductible from the income of the payer spouse, or includable in the income of the receiving spouse, if made under a divorce or separation agreement executed after Dec. 31, 2018.
This also applies to a divorce or separation agreement executed on or before Dec. 31, 2018, and modified after December 31, 2018, as long as the modification:
- changes the terms of the alimony or separate maintenance payments; and
- states that the alimony or separate maintenance payments are not deductible by the payer spouse or includable in the income of the receiving spouse.
On the other hand, generally alimony or separate maintenance payments are deductible from the income of the payer spouse and includable in the income of the receiving spouse, if made under a divorce or separation agreement executed on or before Dec. 31, 2018, even if the agreement was modified after December 31, 2018, so long as the modification is not one described in the preceding paragraph.
The modifications made to your divorce or separate maintenance agreement must state that the alimony amount was changed and state that the alimony payments are not includable in the income of the receiving spouse and deductible by the payer spouse.
Based on the information you stated, the payment amount was changed so you met the first criteria. What is unclear is, did the modification state that the alimony payments are not includable in income or deductible? If this language is included in the modification then you can check the modified box. If the required language is not included in the modification, then you cannot check the modified box.
Topic 452 - Alimony and Separate Maintenance