The Alimony Tax Laws of Pennsylvania
September 21st, 2011
Alimony is defined as the support payment made to former spouses. In Pennsylvania, alimony is related to some specific tax laws. In this article, we have discussed in brief about the alimony tax laws of Pennsylvania.
- According to the law of Pennsylvania, alimony is defined as an income. This makes the amount received as alimony entitled for state taxation. On the other hand, for the payee alimony acts as a tax deductible amount.
- If one pays alimony following an agreement,
the content of the agreement should not describe as the payment as not deductible for the payer and not taxable for the recipient. If any such language is used in the agreement, it will be considered that the payment has no relation with alimony. - According to the tax laws of Pennsylvania, for being considered alimony, the payment should never be restricted depending on other clauses. For example: if a person had made a payment based on circumstances related to children (for instance visitation), the payment will not be described as alimony. This rule is extremely significant because according to Pennsylvania law, payment made for child-support are neither deductible for the payer not taxable for the recipient. This means any payment made for child support has exactly the opposite tax criteria to that of alimony.
- The next tax Pennsylvania alimony tax law is related to household arrangements. According to the tax laws of Pennsylvania, if the payer of the alimony and its payee are staying in same household during the time of payment, the payment will not be considered as alimony. In other words, the tax laws of Pennsylvania says that if already divorced spouses patch up and start staying in the same house again, any payment made following such an incident will not be subject to tax benefits related to alimony.
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