TPP| Tax Consequences of Alimony Payments

Eric Smith, JD, LLM

The last thing on most people's minds during a messy divorce is the tax treatment of the support payments that will eventually be made. Unfortunately, many matrimonial attorneys also fail to consider or fully detail the parties' intended tax treatment of these payments. As a result, final settlement agreements between spouses will often provide for different types of support payments (e.g., alimony, child support) from one spouse to the other, but will be silent as to the allocation of such payments and the extent to which such amounts should be tax deductible by the paying spouse. Similarly, prior to a divorce being finalized, it is common for matrimonial judges to issue temporary orders requiring support payments without detailing the proper tax treatment of such payments.