Tax Considerations for Spousal Support

Generally speaking, spousal support, or as it is commonly referred to, alimony, is taxable to the recipient/payee, and tax deductible to the payor. See IRC 215 and IRC 71. Language identifying the tax implications of spousal support/alimony should be and often is included in the final divorce judgment/decree. However, it is often overlooked or unknown that even temporary spousal support under a temporary or interim order issued during the pending divorce, or agreed upon in writing by the parties (or their attorneys) in a separation agreement, is taxable to the payee and tax deductible to the payor. The key is that in each situation, the support obligation is set forth in writing. Although not necessarily required under law, to avoid any ambiguity or uncertainty, the temporary order and/or written separation agreement should state that the support shall terminate upon the death of either the payor or payee and acknowledge the taxable nature of support. Such language will show the intent of the parties, or the court, that the payments set forth in the temporary order or written separation agreement were intended to be for spousal support.