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Alimony Recapture Rules

What is alimony recapture for tax purposes?

If your alimony payments in the third year decrease or the alimony payments terminate during the first 3 years, you may be subject to the alimony recapture rule. The three year period starts with the first calendar year which the taxpayer makes an alimony payment satisfying:

  • a divorce decree or
  • separate maintenance or
  • written separation agreement.

If the taxpayer pays some maintenance costs under temporary support orders, then these payments do not count as alimony for the alimony recapture rules according to the IRS.

What happens if I am subject to the alimony recapture rule?

Alimony recapture rule for the person who paid the alimony

If a taxpayer is subject to the alimony recapture rule, the taxpayer has to include in income in the third year part of the alimony payments he or she deducted in the previous tax years.

Alimony recapture rule for the person who received the alimony

If you received any alimony payments that decrease or terminate during the first 3 years, then you may deduct in the third year part of the alimony payments you previously included in taxable income.

I did not make any alimony payments in the second or third year, am I subject to the alimony recapture rule?

If the taxpayer makes an alimony payment in one year, then the second and third calendar years are the second and third years for the alimony recapture rule whether actual alimony payments were made or not.

Reasons for alimony recapture

Below are some of the reasons for reduction or termination of alimony payments that need alimony recapture rules.

  • a change in the divorce or separation instrument of the taxpayer
  • taxpayer fails to make timely alimony payments
  • taxpayer is no longer able to provide the same level of support
  • taxpayer's spouse needs less support
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