I am paying alimony overseas to my-ex-spouse who is non-resident of USA. How can I report returns for the payments?

[bluedeb · Accepted solution]

You cannot deduct the alimony payments. 

Alimony taxation

Today, alimony or separate maintenance payments relating to any divorce or separation agreements dated January 1, 2019 or later are not tax-deductible by the person paying the alimony. The person receiving the alimony does not have to report the alimony payments as income.

How the IRS defines alimony payments

To qualify as alimony or separate maintenance, the payments you make to your former spouse must meet all six of these criteria:

1. You don't file a joint tax return with your former spouse.
2. You make payments in cash, by check, or by money order.
3. You make payments to or for a spouse or former spouse under an applicable divorce or legal separation agreement.
4. Legally separated spouses cannot be part of the same household when making payments.
5. Liability for the payment doesn't extend beyond the death of the spouse who receives payments.
6. The payment is not child support or a property settlement.

Some divorce payments aren't considered alimony

When the IRS defines alimony, it also specifically excludes certain payments as not qualifying for alimony or separate maintenance treatment. These include:

• Child support
• Non-cash property settlements
• Payments to keep up the property of the alimony payer
• Payments for the use of the alimony payer's property
• Voluntary payments not required under a divorce decree or separation agreement

If a person paying alimony must also pay child support, but they do not fully complete the payment for both, payments would go toward child support first for tax purposes.

See the following for more information.

https://turbotax.intuit.com/tax-tips/marriage/filing-taxes-after-a-divorce-is-alimony-taxable/L3RVrB...

[MaryK4]

Alimony is only deductible if you were divorced or legally separated from the spouse to whom you make the payments, and the year of the decree must be before 2019.

 

[bluedeb · Accepted solution]

@MaryK4  He is paying alimony which is NOT deductible on his return.  Plus, I mentioned that in my above post.  I said "payments relating to any divorce or separation agreements dated January 1, 2019 or later"

[dudorov-consulti]

Thank you. Yes,  it was done before 2019 (in 2014). But the decree sinned not in USA .

[bluedeb · Accepted solution]

@dudorov-consulti  It really doesn't matter because Alimony Payments to an ex is NOT deductible on your return.

[dudorov-consulti]

Thank you ! But what about this article then? When it says it can be deducted
https://www.thetaxadviser.com/issues/2015/aug/us-tax-implications-of-alimony-payments-to-us-nonresid...

[bluedeb · Accepted solution]

@dudorov-consulti It depends what country your ex lives in.  Some countries require you to hold out taxes. There is allot of situations in the article you gave.  Still not sure you claim Alimony paid.

A U.S. citizen payer should be allowed a deduction on his or her U.S. tax return for alimony payments made to a nonresident. However, it is important for the U.S. resident payer to withhold 30% tax on payments to a nonresident recipient unless Form W-8BEN is provided. Otherwise, the payer could be liable for the withholding tax.

U.S. Tax Implications for a Nonresident of Receiving an Alimony Payment

If the alimony payment is non-U.S.-source income, then it is outside the scope of U.S. taxation, and there is no impact to the nonresident recipient.

However, if the alimony payment is U.S.-source income, then one of the following will result:

• If 30% was withheld correctly, the nonresident has nothing further to do or file with the IRS;
• If there was properly no withholding, the nonresident needs to file a Form 1040NR, U.S. Nonresident Alien Income Tax Return, attaching Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), stating why he or she qualifies for no tax under the respective treaty;
• If 30% should have been withheld but was not, the nonresident needs to file a Form 1040NR and pay over the appropriate tax to the IRS; or,
• If 30% was withheld and it should have been a lower rate, the nonresident needs to file Form 1040NR, attaching a Form 8833 to claim a refund based on the lower rate of withholding under the treaty.