Informal agreements between spouses about child support payments

Tax problems involving temporary alimony or child support

Frequently in divorce negotiations or mediation, spouses reach informal agreements about temporary alimony or child support payments. But occasionally they neglect to get the agreement in writing or to get a court order outlining the agreement. Don't make this mistake.

Getting a court order isn't difficult. If you and your spouse agree on the amount of temporary alimony and/or child assistance, you can put your agreement in writing as a "stipulation." You (or your attorney) can then take the simple actions needed to get that stipulation turned into a court order. It involves asking a judge to sign the stipulation. You and your spouse ought to not need to seem in court.

If you're paying alimony, you might resent it-but a minimum of there is one bright spot. Alimony, including temporary alimony, is tax deductible towards the payer. For alimony to be deductible, however, the court must order it or the parties must agree to it in writing. If you pay alimony or temporary alimony according to an informal, oral agreement, you cannot deduct those payments on your tax return.

For alimony to be deductible, the payer and also the recipient of alimony cannot file a joint return. If you're the recipient of alimony, it's income you have to report on your tax return.

And beware: alimony payments produced following the legal obligation to pay alimony ends-that is, voluntary payments-are not tax deductible towards the payer, but they might be taxable income to the former spouse who received the payments.

Child assistance, unlike alimony, is neither deductible for the parent paying it nor taxable as income to the parent receiving it. However, regardless of whether you and your spouse are living apart, you will want to make arrangements for child assistance so that your children are adequately cared for.

Get your tax agreement in writing

Whatever you and your spouse determine to complete about taxes, be sure to get the agreement in writing. Have it notarized or possibly even reviewed by an attorney. Be certain, too, to check with an accountant or perhaps a financial planner for guidance on the tax implications of your divorce.

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