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What you need to know if you want to deduct alimony

On Behalf of | Jul 13, 2021 | Alimony

Individuals who had their divorce finalized in 2018 or before can typically deduct their alimony when it comes time to file their taxes in Maryland. However, there are certain rules that they need to meet in order to do so. This is what you need to know if you want to deduct alimony.

It has to be in cash and not an asset

You can only deduct alimony if you are making a monetary transaction. You can pay it in the form of a money order, or you can even have it deducted from your paycheck every pay period. However, if you give your ex any type of asset or property as a form of alimony, it isn’t deductible.

The divorce decree has to state that it’s alimony

Your divorce decree has to clearly state what this payment is. It can’t say it’s for things like child support or any other type of maintenance. You can only deduct the amount that’s stated as alimony. Anything else isn’t eligible.

You need to live in different households

Some exes do live in the same household after divorce due to things like raising children or for financial reasons. Whatever the case is, you can’t deduct alimony if you both still live in the same household. You both need to have your own residence and mailing address.

Deductions can help you lower the amount of money that you have to pay when you file your taxes. If you pay alimony to your spouse and got divorced prior to 2019, you often can deduct alimony if you meet certain criteria. An attorney may help you understand the tax implications of your divorce decree.

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