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How does alimony affect taxes in Massachusetts?

Many Massachusetts residents may believe that alimony is an antiquated, traditional thing of the past. This however, is not entirely true. Although alimony many not be as prominent as it once was, alimony is still awarded in many divorce cases across the state. Understanding alimony and its application is the first step towards seeking a judicial determination.

Generally, alimony is ordered from one former spouse to another under a divorce or separation agreement. In Massachusetts, there are many different factors which go into an alimony decision. The awarded alimony income is included in the gross income from the receiving spouse, meaning that the paying spouse can deduct this amount from his or her gross income for taxes. Child support, however, does not work in this same way.

Massachusetts also follows the federal rues on alimony recapture. These rules make a paying individual report the alimony payments as income for a three-year period following divorce. This is to prevent property settlements from qualifying as alimony treatment. Once in the third year, the first two years may be "recaptured" when the payments in the first three years decline by more than $15,000.

The rules affecting alimony, payments and taxes can get extremely complicated for those that are new to alimony. If you are in doubt about your ability to achieve alimony or need help understanding how alimony will affect your income and taxes, you are not alone. Many residents across the state discuss their situations with legal professionals each year in order to understand their rights and legal options. Speaking with an experienced legal professional in the state of Massachusetts is one sure way to clear up any confusion you may have regarding a new legal obligation.

Source: www.Mass.gov, "Alimony," accessed Oct. 6, 2014

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