Where Is Alimony Reported on Form 1040?

Alimony consists of payments made to a spouse or former spouse as required by a separation or divorce agreement. These payments are intended to provide economic support to a lower-earning spouse. The proper handling of alimony on federal income tax returns is necessary for both the payer and the recipient, as errors can lead to incorrect tax liabilities. The tax treatment of these payments depends entirely on the date of the legal agreement.

Determining Taxability Based on Agreement Date

The tax rules for alimony are governed by a date established by the Tax Cuts and Jobs Act (TCJA). For federal tax purposes, the key date is December 31, 2018. Divorce or separation agreements executed on or before this date fall under one set of rules, while agreements executed after this date follow a different tax treatment.

For agreements finalized by December 31, 2018, the person paying the alimony can deduct the payments from their income, lowering their taxable income. Consequently, the person receiving the payments must report them as taxable income. This structure shifts the tax burden from the higher-earning payer to the lower-earning recipient.

For agreements executed on or after January 1, 2019, this treatment is reversed. Under the TCJA, alimony payments are no longer deductible by the payer. The recipient does not include the alimony payments in their gross income, meaning the payments are received tax-free. It is also possible for the new rules to apply to older agreements if they are formally modified after 2018 and the modification document explicitly states that the TCJA rules should apply.

How to Report Alimony Received

Individuals receiving alimony under an agreement dated on or before December 31, 2018, must report the payments as income. This income is reported on Schedule 1 of Form 1040, titled “Additional Income and Adjustments to Income.” The total amount of alimony received for the year is entered on Line 2a, and the date of the original divorce or separation agreement must also be entered.

The Internal Revenue Service (IRS) has a specific definition of what constitutes alimony for tax purposes.

• The payments must be required by a divorce or separation instrument.
• The payer and recipient cannot file a joint tax return.
• The payment must be in cash, which includes checks and money orders.
• There is no liability to make payments after the recipient’s death.
• The parties must not be members of the same household when the payments are made if they are legally separated.

These payments must be distinct from other types of financial transfers. For instance, child support is never considered alimony and is not taxable to the recipient. Property settlements, which are divisions of marital assets, are also not alimony.

How to Report Alimony Paid

An individual paying alimony under a pre-2019 agreement can deduct these payments to reduce their adjusted gross income. This deduction is claimed on Schedule 1 (Form 1040), and the total amount paid during the tax year is entered on Line 19a. This deduction is available regardless of whether the taxpayer chooses to itemize deductions or take the standard deduction.

A requirement for claiming this deduction is providing the recipient’s taxpayer identification number. The payer must enter the recipient’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) on Line 19b of Schedule 1. The IRS may disallow the alimony deduction if this information is missing or incorrect.

In addition to the potential loss of the deduction, the payer may be subject to a $50 penalty for each failure to provide the recipient’s TIN. If a former spouse is unwilling to provide their TIN, the payer can use Form W-9, “Request for Taxpayer Identification Number and Certification,” to officially request the number from the recipient.