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Alimony is Not Deductible unless You’ve Paid All Your Child Support

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Generally, child support is not tax-deductible, but alimony is. However, the IRS has ruled that the payer of support or alimony does not have the right to deduct any of the alimony until all child support is paid. (See: IRC Sec. 71(c)(3))

This is important for both the payer and the recipient. For the payer, you must understand that when you are paying both support and deductible alimony, the IRS will allocate all payments first to non-deductible support. For the recipient, it means you do not have to claim alimony income until all support is paid. Of course, check with your tax preparer first.

(Credit to CPA and veteran divorce business valuator Jim Koerber, Hattiesburg, MS, www.koerbercompany.com, for supplying the tax opinion.)

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