Despite the change in federal law, some states will allow alimony payments to be deductible for state income taxes. In New York, alimony payments are still deductible from New York State and City taxable income, even if a divorce agreement came after 2018.
- Your payments must be made pursuant to a written divorce or separation instrument. Qualifying “instruments” include divorce decrees, separate maintenance decrees, and separation agreements.
- Make sure that your tax return includes the payee’s Social Security Number. This is required in order to include it as a deduction.
- If your divorce or separation agreement expressly notes that the payments are not alimony and designates the payments for another purpose, then it does not qualify.
- As per your divorce or separation agreement, your payments must be made to or on behalf of your spouse or ex-spouse. It is fine if the alimony payments are through a third party such as your attorney.
- If you are filing a joint return with your ex-spouse, then your alimony payments will not qualify as deductible.
- If your ex-spouse has passed away and there remains a requirement to continue to make alimony payments to his or her estate and/or beneficiaries, then the alimony payments are not deductible. There can be no obligation to continue alimony payments in order to qualify as a deduction.
- Alimony payments must be made in cash or cash equivalent (e.g. credit card, check, or money order) to qualify as deductible.
- Child support doesn’t count. Payments made as child support aren’t deductible for the payer nor are they taxed as income to the recipient.
- Payments or services that are part of property settlements are not considered alimony payments.