Tax Implications of Alimony

Alimony, or spousal support, has specific tax implications. For divorces finalized before 2019, the payer can deduct alimony payments from their taxable income, while the recipient must report it as taxable income. However, for divorces finalized after 2018, these rules changed: alimony payments are no longer deductible for the payer, nor are they taxable for the recipient. This shift can affect financial planning and tax responsibilities, so it’s advisable to consult with a tax professional for individual circumstances.