Spousal support taxation

1. Payments in cash.

The payments must be made in cash.

2. Received by or on behalf of spouse or former spouse.

Payments to a third party on behalf of the ex-spouse will qualify if made at their written request.

3. Received under judgment, written agreement, or order.

The payments must be received under a qualifying instrument that was in effect when the payment was made.

4. Not designated as not includable in gross income and not deductible.

The instrument must not designate the payments as not includable in gross income and not deductible. Therefore, if the couple wants to avoid includability and deductibility, the parties should clearly state their intention in the agreement.

5. If judgment entered, parties must not be members of same household.

The parties can't live in the same household when the payments are made.

6. No liability for payments or substitute for payments after payee's death.

There must be no liability to make the payments for any period after the payee's death.

7. Not fixed as payable for child support.

If any amount to be paid is reduced on the happening of a contingency relating to a child of the support payor or anytime they can clearly be associated with a such a contingency, payments made before the reduction takes effect will be treated as fixed for child support and not includable nor deductible.

8. No joint return.

The parties must not file a joint tax return.