Whether you must pay federal taxes on spousal support depends on when you were divorced. For older divorces, it may also depend on how well you negotiated with your ex-spouse. California state taxes have different rules than federal ones on spousal support taxes.
Divorces before Dec. 31, 2018
If your divorce occurred before Dec. 31, 2018, the person paying the support gets to deduct it from their federal taxes. The person receiving the spousal support must claim it as income when filing their taxes.
Divorces after Dec. 31, 2018
If your divorce finalized after Dec. 31, 2018, then the person paying the spousal support does not get to deduct it on their federal taxes. The person receiving the spousal support does not have to claim it as income.
The middle ground
Spouses who get along well may want to negotiate and follow the new federal tax laws. This change stops the person paying the spousal support from deducting it, but the person receiving the support does not have to claim it as income.
California taxes
California allows people paying spousal support to deduct it from their state taxes. Residents receiving spousal support in California must claim the payment as income.
Important factors to keep in mind
You do not want to be on the wrong side of the IRS or California tax authorities, so there are several important factors to keep in mind. First, your divorce decree must identify the payment as spousal support. It is not the same as child support or other payments that a judge may order you to make. The amount must be money; it cannot be assets or some material good. You must also live in a separate location from your former spouse.
Tax laws are constantly changing, so you may want to consult a divorce attorney. A legal professional may help you get the best resolution possible for your particular situation.
