How to determine whether payment of money to a spouse post-divorce qualifies as alimony under Internal Revenue Code §71 for tax-deduction purposes – Part 3.

This post continues discussion of the Make the Tax Code Your Friend from the Winter 2012 Family Law Advocate journal of the American Bar Association by Christopher Melcher.

Rule 6: Payments must terminate on the death of the payee.

This requirement was adopted to distinguish between property settlement in the divorce and true alimony. “Dead people require little, if any, support,” so for alimony to be tax-deductible, the payment should terminate upon the death of the supported spouse.  See Taft, Tax Aspects of Divorce and Separation, §5.03[1][v]. On the other hand, an obligation regarding the division of marital property survives the death of either party because it creates a vested property right that can be transferred on death.   So, if any of the payments are required to be on or after the death of the supported spouse, the payments look like a property division, rather than for maintenance.

If this rule is violated, none of the payments before or after the death of the spouse qualify as alimony.

Rule 7: Payments may not be fixed as child support.

Payments designated as child support are not deductible as alimony. Even if a payment is labeled as “alimony” the payment may be treated as disguised child support if the amount of the payment reduces upon some contingency related to a child.

Rule 8: A joint return is not filed.

The final requirement is that the parties file separate tax returns. They cannot file a joint tax return together, with one claiming an alimony as income and the other claiming the tax-deduction for alimony paid.

For an overview of Texas alimony laws, please see our website O’Neil & Attorneys.

For additional information about alimony and maintenance in Texas, see the following blog posts here on the Dallas Texas Divorce Law Blog:

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, 2011-2018, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. In 2014-2018, Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW. She was named one of the Best Lawyers in America for 2016 and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.