Taxpayer asks:
My husband and I went through a mediator instead of a divorce lawyer. Our MSA specifies a certain spousal support amount each month. If he wants to give me extra and we both agree on it, can we claim this as spousal support on federal taxes or does he have to call it a gift? Thank you.
taxgirl says:
For income tax purposes, spousal support is considered alimony and is deductible to the taxpayer making the payments. It is an “above the line” deduction, also called an adjustment to income, which means that the taxpayer doesn’t have to itemize in order to claim it (this is a tax policy pet peeve but that’s a separate post). Alimony which is received by a taxpayer must be reported on a tax return as income.
In order to deduct alimony payments under a divorce or separation decree or agreement, all of the following requirements must be met:
- You and your spouse or former spouse do not file a joint return with each other;
- Alimony payments must be paid in cash, checks or money orders (in other words, noncash property settlements for cars, etc., are not considered alimony);
- The payment must be considered alimony – the divorce decree or other agreement cannot state that the payment is for something other than alimony;
- You and your former spouse cannot be members of the same household when you make the payment;
- You have no liability to make any payment, in cash or property, after the death of your spouse or former spouse; and
- Your payment is not treated as child support.
And here’s the part that matters the most to you: voluntary payments, meaning those not required by law, decree, settlement agreement or otherwise, do not qualify as alimony. Payments made “just because” would not be deductible to the payor or treated as income to the recipient.
As to the second part of your question, for gift tax purposes, gifts to spouses are exempt. If your ex is not legally your spouse, then anything over the annual exclusion – currently $13,000 per person per year – would be considered a gift to the extent that it’s not otherwise excluded (such as if he’s paying your tuition or medical expenses directly to a medical or educational institution).
These are the post-1984 rules. If you’re still receiving support from a pre-1984 divorce, first of all, wow (!) and second, note that your situation may be a little different so plan accordingly.
The specific rules regarding alimony and divorce can be complicated and vary state by state, which may affect your federal tax status. I highly recommend consulting with a family law attorney and/or tax professional before making any financial or tax decisions relating to child support, alimony, or other support.
For the record, taxes or no taxes, I have to think if more men wanted to just give their wives more money just for the heck of it (and vice versa), there might be fewer divorces. But then, I’m no couples counselor.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
