Alimony is the payment of money to or for a spouse or former spouse under a divorce or separation agreement.

Prior to 2019, a taxpayer that paid alimony or separate maintenance payments to a former spouse could deduct the amount of such payments from gross income. The recipient of such payments was required to include them in gross income.  This rule applies to both Federal and Massachusetts income tax returns.

With the passage of the Tax Cuts and Jobs Act of 2017 (TCJA), both the deduction for alimony paid by a taxpayer and the inclusion of alimony in gross income for the recipient were repealed for Federal income tax purposes. These changes apply to any divorce or separation instrument executed after December 31, 2018. For any divorce or separation instrument executed prior to January 1, 2019, the original reporting rules as described above still apply.

Note: Alimony payments are not to be confused with child support payments. Child support payments are neither deductible by the payer nor taxable to the recipient, for both Federal and Massachusetts income tax purposes.

Massachusetts Exception

Massachusetts had adapted the Federal rules as they existed on January 1, 2005 with respect to the deduction of alimony payments and the inclusion of such payments in income, and elected not to adapt the above provisions of the TCJA. Therefore, Massachusetts taxpayers can still take a deduction for alimony payments made to a former spouse on their Massachusetts personal income tax return and recipients of such payments must still include them in gross income.

Tax Tip

Individuals who receive alimony from a former spouse usually do not have Federal or State income taxes withheld from the alimony payments they receive. Such individuals should make Estimated Tax Payments on the alimony they receive quarterly.

Note that alimony income is not subject to the Federal Self-Employment Tax.

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