Divorce
December 15, 2021

5 Rules Governing Tax Deductible Alimony in Texas Divorce Cases

Divorce alimony payments, also referred to as spousal support, are payments made to a former spouse for a successful transition from marriage to divorce. Generally, the person with a higher income during the marriage is responsible for the payments, irrespective of their gender. Alimony payments are different from other types of payments made to a spouse after marriage, as the amount can be used to write-off taxes. It is, therefore, important to understand the laws governing tax deductible alimony. The blog post discusses five rules that govern divorce alimony in Texas. Take a look.

1. Only the Spouse or an Authorized Person Can Collect Alimony

An alimony payment doesn’t necessarily need to be paid directly to the spouse. However, the money should directly benefit the spouse in any form mentioned under legal guidelines. Anything that’s paid for the betterment of the ex-spouse, for instance, cash payment of rent, mortgage, tuition liabilities, or elements mentioned in the divorce decree, qualifies as alimony. The rules regarding alimony payments are quite intricate and therefore, one must consult a divorce lawyer to get clarity.

2. Spouses Need to Stay Separate, Unless Alimony is Temporary

If a divorce is finalized and the couple continues to share the same accommodation for more than a month, the payments can’t be construed as alimony. The only exception is a condition wherein the parties are only legally separated, but not divorced. Such cases are covered under temporary alimony.

3. Payments Must Cease After the Death of the Payee

Alimony payments must terminate after the death of the payee or the supported spouse, and this rule helps in distinguishing between true alimony and property settlement. The concept of alimony ceases after the death of either spouse. If the recipient dies, there is no more requirement to pay alimony. If the paying spouse dies, the recipient automatically receives the property under the name of the paying spouse. If this rule is violated, none of the payments before or after the death of the spouse qualify as alimony.

4. Child Support and Alimony Can’t Replace Each Other

Simply put, payments designated as child support cannot be counted as alimony. Payments labeled as alimony, if they meet certain requirements can be counted as disguised child support if the amount of child support is reduced for some reason and it’s likely to impact the overall well-being of the child.

5. Both Spouses Must File Separate Returns

Parties to alimony payments must file separate returns as joint returns are no longer allowed after separation. The recipient cannot state the alimony amount as income and the payor can’t claim tax deduction on the alimony paid, as in the case of joint returns.

Wrapping Up

Alimony laws in Texas are quite intricate and extend beyond the those mentioned in the blog post. Divorce is indeed a stressful affair, wherein alimony taxes and other calculations may seem a petty issues and take a backseat. To lead a normal life after separation, it’s essential for both spouses to understand alimony laws. Consult our divorce lawyers in Texas to understand the laws governing alimony and other factors after a divorce. If you are looking for the best divorce lawyers in Texas, then look no further. The team of lawyers possess extensive experience in successfully handling complex divorce and alimony cases. Let us help you by filling out our contact form. You can also call us at 214-599-9979.