Are You Eligible for a Tax Deduction on Alimony Payments?

8 April 2025

Alimony payments can be a significant financial burden, but did you know they used to be tax-deductible? If you're paying alimony or considering a divorce settlement, you might be wondering whether you qualify for a tax deduction.

The answer? It depends on when your divorce was finalized. The Tax Cuts and Jobs Act (TCJA) changed the rules, and if you're not aware of how this impacts you, you could be leaving money on the table (or worse—getting an unpleasant surprise at tax time).

Let’s break it all down so you can understand where you stand when it comes to alimony and tax deductions.

What Is Alimony?

Alimony, sometimes called spousal support, is a court-ordered payment from one spouse to another after a divorce. The purpose? To help the lower-earning spouse maintain a reasonable standard of living post-divorce.

It’s different from child support, which strictly covers expenses related to children. Alimony is meant to assist an ex-spouse financially, and the amount and duration of payments depend on several factors, including the length of the marriage, income disparity, and the ability of the receiving spouse to support themselves.

Now, let’s tackle the big question: Can you deduct alimony payments from your taxes?

The Impact of the Tax Cuts and Jobs Act (TCJA) on Alimony Deductions

Before the TCJA came into play in 2017, alimony had a straightforward tax treatment:

- If you paid alimony, you could deduct it from your taxable income.
- If you received alimony, you had to report it as taxable income.

However, the TCJA completely flipped this system on its head.

How the TCJA Changed Alimony Taxation

- If your divorce was finalized before January 1, 2019 – You can still deduct alimony payments (as long as they meet IRS qualifications).
- If your divorce was finalized on or after January 1, 2019 – Alimony payments are no longer tax-deductible, and the recipient does not need to report them as taxable income.

This was a major shift. Essentially, the paying spouse now shoulders the entire tax burden, making alimony far more expensive for those required to pay it.

But wait—does this mean that if you’re paying alimony today, you have no tax benefit at all? Not necessarily. Let’s break it down further.

Are You Eligible for an Alimony Tax Deduction?

1. When Was Your Divorce Finalized?

If your divorce was finalized before January 1, 2019, you may still claim a tax deduction on your alimony payments. However, modifications to your divorce agreement after 2019 could impact this. If the modification specifically states that the new tax laws apply, you may lose your deduction.

2. Does Your Alimony Meet IRS Requirements?

Even if your divorce qualifies under the pre-2019 rule, your alimony payments must meet the following IRS criteria to be tax-deductible:

- Payments must be made in cash, check, or money order (non-cash payments don’t count).
- The payments must be to or on behalf of your ex-spouse (not a third party like a child or creditor).
- You and your ex must file separate tax returns (no joint returns).
- The payments must end upon the recipient's death (if the payments continue, they might be classified as something else, like property settlements).
- The payments must be officially stated in your divorce decree or separation agreement.

If your payments don’t check all these boxes, they’re not considered tax-deductible alimony by the IRS.

What If You’re Paying Child Support Too?

A lot of people pay both alimony and child support. But here’s the catch: Child support is never tax-deductible.

So if your court-ordered payments combine alimony and child support in a lump sum, only the portion explicitly designated as "alimony" may qualify for a deduction (if your divorce was finalized before 2019).

What If You Modified Your Divorce Agreement?

Modifications to your divorce agreement can mess with your tax situation. If you amended your divorce settlement after 2018 and opted into the new tax rules (which remove the deduction), you lose the ability to write off alimony payments.

However, if your modification did not mention the tax law changes, you should still be able to deduct your payments under the old rules.

This is why it’s crucial to read the fine print if you modify your divorce agreement—what seems like a small change may have unintended tax consequences.

What If You Missed Out on the Deduction? Can Anything Be Done?

If your divorce was finalized in 2019 or later, you’re out of luck when it comes to deducting alimony. But that doesn’t mean you can’t negotiate an arrangement that softens the financial blow.

Here are a few alternative strategies:

1. Negotiate a Lump-Sum Payment

Instead of making monthly payments, some paying spouses opt for a lump-sum settlement. Since alimony isn’t deductible anymore, negotiating a smaller, one-time payment upfront could save money in the long run.

2. Consider Adjusting Other Financial Terms

If you’re still in the divorce negotiation phase, you might try adjusting property division or other financial terms to offset the cost of alimony.

For example, instead of paying large alimony sums, you might transfer assets like real estate or retirement funds to your ex-spouse, which could have better tax advantages.

3. Use a Private Contract Instead of Court-Ordered Alimony

In some cases, ex-spouses reach a private agreement instead of a court-mandated alimony order. While this has risks, structuring payments as another type of financial support might provide tax benefits.

However, before considering this, speak to a tax professional! The IRS has strict rules about what qualifies as alimony and what doesn’t.

Final Thoughts: Is There Still a Silver Lining?

For those paying alimony under agreements finalized after 2018, the loss of the tax deduction is a tough pill to swallow. It makes alimony payments more expensive and shifts the tax burden entirely onto the payer.

However, if your agreement was finalized before 2019, you may still qualify for the deduction—as long as you meet the IRS requirements and haven’t modified your agreement in a way that removes the tax benefit.

If you're in the middle of a divorce settlement and worried about taxes, having a good tax professional or divorce attorney can be a game-changer. A little planning now can save you a lot of money in the long run.

At the end of the day, tax laws are always changing, and staying informed can make all the difference in protecting your financial future.