Alimony

• According to IRS document Publication 504, to be considered a alimony, the payment you make to your spouse must be in cash, the instrument of divorce must designate the payments as alimony, you and your spouse must not live in or belong to the same household, and your payments must not be treated as child support.
  
  

Alimony and the Payer

• Your alimony payments to your ex-spouse are tax deductible by you. You do not need to itemize your deductions to deduct alimony payments. However, according to Publication 504, you must use Form 1040. You cannot use Forms 1040A, 1040EZ or 1040NR. You can put the amount you paid on line 31a of Form 1040.; On line 31n, you must enter your spouse's Social Security number.
  
  

Alimony and the Recipient

• If you are the spouse who is receiving alimony payments, you must include these payments as part of your monthly income. Since alimony payments are considered part of your income, you have to pay income tax on these payments. How much you have to pay depends upon your income. Depending on your income, alimony payments you receive might increase your income considerably or they can have hardly any effect. To report alimony payments, you have to use the tax return Form 1040 or Form 1040NR. If you use Form 1040, you must report the alimony on line 11. You can also report it on Schedule NEC of Form 1040NR, line 12. You cannot use Forms 1040A, 1040EZ or 1040EZ-NR.
  
  

Other Federal Taxes

• Medicare and Social Security taxes do not apply to the alimony payments you receive, even though alimony is considered part of your income. These taxes are withheld from an employee's paycheck by employers and paid to the IRS. if you are the spouse who is making the alimony payments, you do pay Medicare and Social Security tax on the payments, since they are made with after-tax income.