Tax Consequences of Divorce

There are several possible tax consequences if you have gone through a divorce since you last filed your taxes. First and foremost, of course, may be a change in your filing status; you may have gone from a “joint filer” to a “single filer.”

Other tax issues, however, have more to do with deductions and related issues such as child support, who gets to claim the child as a dependent, and alimony.

Child support

Child support is never tax deductible for the payer — and it’s also never considered “income” for the recipient. In order to be considered “child support” for tax purposes, it must be denoted as such in the divorce or separation agreement. If it is lumped together with other types of support (such as the term “family support”), none of it is considered “child support” for tax purposes.

Pay special attention to this part of your divorce or separation agreement, or you could end up paying taxes on what is really child support but simply called something else in your agreement.

Child as Dependent

Who gets to claim the child as a dependent on his or her tax return depends on a few factors, including the amount of support provided by each parent throughout the year for the child. There are also different provisions for parents living together, those living separately, and for unmarried couples.

The rules can get quite complicated, so be sure to consult a tax attorney or other tax professional to discuss your specific situation.

Alimony

Alimony paid pursuant to a divorce or separation agreement is considered “income” and therefore taxable for the recipient. You may claim alimony payments as deductions if all of the following qualifications are met:

  • You are not filing a joint return with the recipient and are not members of the same household;
  • The divorce or separation agreement doesn’t specifically categorize the payment as not alimony;
  • The payments are not child support;
  • You are not required to continue making payments after the death of the recipient;
  • You pay by cash, check, or money order.

As always, be sure to consult a tax attorney or other tax professional regarding your specific situation.