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Bill-7312
Returning Member

Spousal support

Is retroactive spousal support claimed in the current year or must the prior year tax return be recalculated
6 Replies

Spousal support

Alimony is only tax deductible to the payer (and taxable income to the recipient) if the divorce was finalized before January 1, 2019.

 

If your divorce was before 2019, then you deduct alimony when you actually pay it, not when it should have been paid.  And the recipient reports it as taxable income when it is actually paid, not when it should have been paid. 

Bill-7312
Returning Member

Spousal support

Thank you

So your saying if the divorce was not finalized before January 1, 2019, then it is not deductible? 

Spousal support


@Bill-7312 wrote:

Thank you

So your saying if the divorce was not finalized before January 1, 2019, then it is not deductible? 


For divorces that were finalized on or after 1/1/2019, spousal support or alimony is not deductible to the payer and is not taxable to the recipient.  This was part of the 2017 tax reform law.  Your attorneys should have taken this change into account when negotiating the alimony amount, since the same dollar amount of alimony is more "expensive" for the payer in divorces after that date compared to divorces before that date.

 

For divorces that were signed in 2018 or earlier and modified in 2019 or later, there is the option to leave alimony as deductible, or to change it to non-deductible.  That would written into the modification, if that's the situation here. 

Bill-7312
Returning Member

Spousal support

Thank you

Under the Canada Revenue Agency - Support payments it reads as follows

"Spousal support payments" Generally ,support payments made under a court order or written agreement for maintenance of the recipient are taxable to the recipient and deductible by the payer?  

Spousal support


@Bill-7312 wrote:

Thank you

Under the Canada Revenue Agency - Support payments it reads as follows

"Spousal support payments" Generally ,support payments made under a court order or written agreement for maintenance of the recipient are taxable to the recipient and deductible by the payer?  


This is the US Turbotax support web site.  If you are filing a Canadian tax return, their support site is here,

https://turbotax.community.intuit.ca/community/forums/discussion/03/350

 

However, I suspect the general principle still applies that a deduction is taken when it is actually paid, and income is taxed when it is actually received, rather than when it should have been paid or received. 

Bill-7312
Returning Member

Spousal support

Thank you for clarifying that it is a US site, this makes a big difference.

Thanks again

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