[[ALIMONY CAP]] Requirements
In order for
payments to be tax-deductible, all of the following must apply:
-
A written agreement or order. There must be a written agreement or order that specifies the
amount. Click
here
for
a description of the kinds of documents that qualify.
-
Cash. The agreement must provide for payments in cash. Click
here
for more details. Click
here
if you are considering
having
payments made directly to a third party, such as a mortgage, taxes, insurance, or utilities.
-
End on death. The payments must end on the death of the recipient spouse. Click
here
to
read more about this.
-
Not related to a child. If the payments happen to stop within a year of the date when a
child reaches age 18, then
none
of the payments are
. They are child support. Click
here
for more of these situations.
-
Not members of the same household. Generally, the payer and recipient may not live in the same home. Click
here
for exceptions.
-
Not be labeled by the IRS as a disguised property settlement. If the payments are more
than $15,000 a year, you must be careful about something called "recapture." Click
here
if
your
payments might total more than $15,000 a year (that is, $1,250 per month, or $288.46 per week).
-
Reporting Social Security Number. The payer, when he or she claims the deduction, must give the social
security number of the recipient. Otherwise, the deduction could be disallowed and,
to add insult to injury, there could be a $50 fine.
Click
here
for some payments that are
not
.
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