If you are divorced or separated, you should know how your alimony payments factor in at tax time. Any payments made in accordance with a divorce or separate maintenance decree, or written separation agreement from both parties is considered alimony at tax time provided the following are met:

• You do not file a joint return with your former spouse
• You pay alimony in cash, check or money order
• The payment is received by your spouse or former spouse
• There is no specific declaration within the decree or agreement that state the payment is NOT alimony
• You are not living with your spouse at the time of payment, if you are separated under a legal decree
• You aren’t obligated to continue to make payments once your spouse has died
• Your payment isn’t considered child support or settlement on a property

It’s important to remember that not every payment made in accordance with a legal decree or agreement is considered alimony. Alimony payments do not include:

• Noncash property settlements
• Your spouse’s portion of community property income
• Payments to maintain your property (as payer)
• Use of your property (as payer)
• Child support payments
• Voluntary payments

You are eligible to deduct any alimony payments you make, and any you receive are required to be added to your income amounts. You are never able to deduct child support, so if your decree considers both alimony and child support payments, child support will be covered first. If you pay less than the total required, the payments apply to child support first and then alimony.

Noncash property settlements, regardless of how they are paid – either lump sum or installments – are not eligible for alimony. Any payments you make outside of the divorce decree also do not qualify as alimony.

In order to deduct alimony payments, you aren’t required to itemize. You are only able to use a Form 1040, U.S. Individual Income Tax Return to claim alimony deductions, as it’s not available on a form 1040A, Form 1040EZ or Form1040NR. You have to provide your former spouse’s Social Security number, or you may face a $50 penalty and disqualification of your deduction.

If you receive alimony, you are required to include the amount as part of your income on Form 1040. You may also face a $50 penalty if you refuse to provide the payer with your correct Social Security number.