Change in Alimony Information
It is important to take tax considerations into any changes ex-spouses intend to make in support or alimony agreements or decrees. A change in a divorce decree could significantly change the amount of an alimony deduction.
Change in Divorce Decree and Change in Alimony
If you agree to increase what you pay for alimony, it is important to remember that you cannot just make additional payments and deduct them. All of the changes must be properly placed into a divorce decree.
Modification of a divorce decree
A modification of a divorce decree would be needed to make any additional payments or increases in spousal support or alimony deductible as alimony. Payments that you aren’t legally obligated to make as alimony or spousal support under a currently effective written separation agreement or decree providing for spousal support or alimony cannot be deducted by you as alimony and aren’t taxed to the recipient spouse. Any voluntary payments might also subject you to gift tax.
It is important to make sure that any changes are legally enforceable and required by law to ensure a proper deduction for alimony on a tax return.
IRS Requirements for Alimony Change
Even if you were to enter into a written, legally sufficient modification, you would want to be sure that the agreement, as modified, met all the IRS requirements for the deduction. Again, failure to ensure that all requirements have been met can have drastic and hidden tax consequences.
Lastly, it is vitally important that all payments under a modified decree clearly end at the death of the recipient spouse, and that spousal support or alimony be clearly distinguished from child support.