Currently, amounts paid to a spouse or a former spouse under a divorce or separation instrument (including a divorce decree, a separate maintenance decree, or a written separation agreement) may be alimony for federal tax purposes. Alimony is deductible by the paying spouse.
There is no change in tax treatment for divorces signed through December 31, 2018. However, in general, for divorces signed after December 31, 2018, the spouse or former spouse paying the alimony will no longer be able to take a deduction for alimony paid.
The spouse paying the alimony gets a deduction for the amount paid.
Note: To qualify as alimony, payments must meet certain requirements.
Alimony and separate maintenance payments aren’t deductible by the paying spouse.
The repeal of the deduction for alimony and separate maintenance payments applies to any divorce or separation instrument signed after December 31, 2018, or for any divorce or separation instrument signed on or before December 31, 2018, and changed after that date, if the change clearly includes the new tax rule.
How will this affect me?
Emma pays Noah $1,500 of alimony per month based on their divorce decree signed in 2016. Emma will continue to take a deduction of the same amount in tax year 2018 and in future tax years.
Noah and Emma signed their divorce decree in 2018 and Noah was awarded alimony. Since they signed the divorce decree in 2018, Emma will get a deduction for the amount paid in 2018.
Note: If Noah and Emma had divorced after 2018, Emma wouldn’t get a deduction for the alimony she paid to Noah.