Are Alimony and Child Support Payments Tax Deductible?

Tax season for the 2024 tax year will come to a close for most people in the next month. Filers who make regular support payments to ex-spouses or children may wonder whether these payments are deductible on their federal taxes. Alimony is typically deductible while child support is not, but the process can be complicated, as the case of Rojas v. Commissioner shows.

Rojas v. Commissioner

Husband and his new wife were found to have a federal income tax deficiency of more than $24,000. The issue in this case was whether they may deduct alimony payments that Husband made to his former wife (Wife). The US Tax Court determined they could not.

When he divorced Wife in 2012, Husband was ordered to pay monthly family support in the amount of $4,500. In 2016, which was the tax year in which the deficiency was found, Husband made payments of $5,824 to Wife each month, although the court record did not state why the payments were higher than the stipulated amount. The total payments made over the entire year equaled $69,888. Husband and his new wife filed tax forms for the tax year 2016 and deducted these as alimony payments.

Can Alimony Payments be Deducted on Federal Taxes?

The court in this case noted that the US Code typically allows alimony payments to be deducted from gross income, but only if these payments are able to be included in the recipient’s gross income. Even though alimony is generally included in gross income, this rule does not apply to this case because no deductions are allowed for payments to support children.

Husband’s monthly payments meet the legal definition of alimony or separate maintenance payments, but the divorce decree expressly stated that the payments are subject to a child-related contingency. Specifically, Husband was to continue paying $4,500 per month to Wife until both minor children were emancipated or until Wife remarried. The inclusion of this child-related contingency precluded Wife from including the payments in her gross income, which means Husband cannot deduct the payments on his tax filings.

But Is It Equitable?

The petitioners in this case, Husband and his new wife, argue that it is not equitable to deny them the ability to deduct these payments. They asked the tax court to apply equitable principles, but the court stated this argument was without merit. Citing previous case law, the court contended that the tax court is not a court of equity and that the resolution Husband sought was asking the court to make legislative changes enacted by Congress, which is not within the court’s power.