Is Alimony Deductible and Reported as Income for Taxes?

Is Alimony (known as Spousal Support in California Family Law Courts) deductible by the payor and reportable income to the payee?

On your California Return the answer is yes. In California if you receive alimony payments, you must report it as income on your California return. If you pay alimony to a former spouse/RDP, you’re allowed to deduct it from your income on your California return.

On your Federal Return the answer is maybe. The taxation of alimony on federal tax returns recently changed because of the Tax Cuts and Jobs Act of 2017 (TCJA). 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 received as taxable income.

Prior to the changes in the Tax Cuts and Jobs Act, alimony payments were tax-deductible by the person making the payment. The person receiving the alimony had to claim it as income on their federal tax return.

The Tax Cuts and Jobs Act also affects new changes to divorce agreements signed before January 1, 2019. In particular, alternations to the original agreement may change the tax impact of alimony payments. If your divorce papers are modified to explicitly spell out that the repeal of the deduction for alimony payments applies, payments under your divorce agreement will be taxed according to the new rules. Without any modification, the alimony payments for agreements entered into prior to January 1, 2019 are typically deductible by the payor and taxable income to the recipient.