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Alimony payments must meet deductibility requirements

Individuals in Kansas who make alimony or spousal support payments may, in most cases, deduct the amount of the payments when they pay taxes. Likewise, the recipient of alimony payments is generally required to report the payments as income. Not all payments to a former spouse qualify as alimony, though, for tax purposes. Child support payments are usually not deductible, for example, and there are certain requirements that must be met before alimony payments can be deducted.

In order for a payment to a former spouse to qualify as deductible alimony, it must have been made in cash or a cash equivalent. The payment also must have been made pursuant to the terms of a divorce or separation agreement, which must not specifically designate the payment as not alimony. Additionally, the obligation to make payments must cease on or before the payee spouse’s death. At the time the payment is made, the spouses cannot be members of the same household. They also must not have filed a joint tax return.

A case from the state of Texas tested one of the requirements. In that case, the question was whether the payments would terminate on the payee spouse’s death. The tax court first examined whether there was an unambiguous provision in the divorce agreement that would terminate payments. Finding there was not, the court looked to Texas law to see if it would operate to stop the payments. The court decided that neither the agreement nor the law of the state would require that the payments cease upon the payee’s death.

According to the tax court, the payments were not considered to be deductible alimony payments. In a case like that one, an attorney may have been able to help by drafting the divorce agreement to include an unambiguous termination provision. A lawyer with experience in family law may be able to help Kansas individuals who are going through divorce by drafting and filing relevant legal paperwork or arguing on his or her client’s behalf during court proceedings.