Alimony payments have tax implications that are important to know if you are paying or receiving such payments. If payments for alimony, or marital support as it is known in some jurisdictions, and made pursuant to a divorce decree, or agreement, you need to consider the tax implications.
Alimony payments received are taxable in the year received. Generally as there are no taxes withheld from alimony payments the necessity exists to consider the requirement for estimated tax payments, or consider an increase in the amount withheld from your paycheck if you are employed.
Alimony payments made under a divorce or separation instrument are deductible if certain requirements are met. Any payments not required by such a decree or agreement do not qualify as deductible alimony payments.
Amounts paid for child support are not deductible, nor is child support received taxable.