One of the elements in the calculation of Kansas Child Support is Spousal Maintenance (or, as known to the IRS, “Alimony”).
While many think the Tax Cuts and Jobs Act (TCJA) abolished Alimony, that’s not true. The TCJA only abolished the deductibility (and taxability to the recipient) of alimony paid pursuant to a 2019 or later “Divorce Instrument” – a court order, divorce decree, settlement agreement or other document creating the alimony obligation.
Sums paid pursuant to a pre-2019 instrument remain deductible (and taxable to the recipient) even if paid during 2019 or later. Regardless of when paid, the payments must be “qualified” (just as before the TCJA was enacted) as follows:
- Payments must be made by cash or by check.
- Payments must be made in accordance with a divorce document, such as a marital settlement agreement, separation agreement, court order, or divorce judgment. Payments made under to a temporary support order also qualify. The document must state the amount to be paid and describe it as alimony, spousal support, or spousal maintenance.
- Payments must not be characterized as child support or a part of a property settlement.
- Payments must end at the recipient’s death.
- The parties must live apart.
- If the parties file a joint income tax return, alimony payments are not deductible.
- “Front-loading” is prohibited — the advance payment of alimony that’s due later makes those payments non-deductible. Excessive payments are subject to recapture or being taxed to the payor in the third post-separation year.
Even though the taxation of the alimony payments may change (and thereby affect the calculation of the Income Tax Considerations adjustment of the Child Support Guidelines), the alimony element of a Kansas Child Support calculation is not changed.
Brad Short and Randy Spivey