The short answer
Divorce changes your taxes in several ways. Alimony is treated differently depending on whether your divorce or separation instrument was executed before 2019 or after 2018. Child support is never deductible or taxable. Your filing status depends on whether you are divorced by December 31. The custodial parent generally claims the children. Property transferred between spouses because of the divorce is generally not taxable, and retirement accounts can be divided without tax if it is done correctly.
Federal tax rules vs. state family law
State law decides whether you are married, divorced, or legally separated, and how property and support are divided. Federal tax law then decides how those payments and transfers are taxed. This guide covers only the federal tax side.
Alimony: the date of your instrument matters
| Divorce or separation instrument | Payer | Recipient |
|---|---|---|
| Executed after 2018 | Not deductible | Not taxable |
| Executed before 2019 and not modified (or modified without adopting the new rules) | Generally deductible | Generally taxable |
| Executed before 2019 and modified after 2018, with the modification expressly saying the new rules apply | Not deductible | Not taxable |
Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument; voluntary payments outside an instrument are not alimony. Simply modifying a pre-2019 instrument — for example, increasing the payment — does not switch it to the new rules unless the modification expressly says so. Under a pre-2019 instrument, taxable alimony received also counts as compensation for IRA contribution purposes.
Child support
- A payment specifically designated as child support, or treated as designated, is not alimony.
- It is not deductible by the payer and not included in the recipient's income.
- If both are required and the payer pays less than the total, the payments apply first to child support.
Filing status after divorce or separation
- Divorced by December 31: considered unmarried for the whole year — file as single or head of household.
- Still married on December 31: married filing jointly or married filing separately, unless you meet all the "considered unmarried" tests for head of household.
- Legally separated under a decree of separate maintenance by year end: treated as unmarried.
Who claims the children
- Custodial parent: the parent the child lived with for the greater number of nights during the year.
- Form 8332: the custodial parent can release the claim to the noncustodial parent, for 1 year, specified years, or all future years. The noncustodial parent attaches it each year. This lets the noncustodial parent claim the child tax credit, additional child tax credit, and credit for other dependents.
- Not transferable: head of household status, the earned income credit, and the dependent care credit stay with the custodial parent.
- Revoking: the custodial parent can revoke a release using Part III of Form 8332.
Property, the home, and retirement accounts
| Transfer | Federal tax treatment |
|---|---|
| Property to a spouse, or to a former spouse incident to the divorce | No gain or loss recognized; the recipient takes the transferor's basis. Does not apply if the recipient is a nonresident alien. |
| IRA transferred under a divorce decree or written instrument incident to it | Not a taxable transfer; it becomes the recipient's IRA from the date of transfer |
| Employer plan benefits paid to a spouse or former spouse under a QDRO | Taxable to the recipient spouse or former spouse, who may be able to roll them over tax-free |
| QDRO benefits paid to a child or other dependent | Treated as paid to the plan participant |
A qualified domestic relations order (QDRO) is a court order under state domestic relations law that gives a spouse, former spouse, child, or other dependent the right to receive benefits from a qualified retirement plan. Withdrawing from an IRA instead of transferring it under the decree can trigger tax and penalties.
Community property states
If you lived in a community property state — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin — special rules can apply to how income is split between spouses before the divorce. See Publication 555.
Examples
| Kim | Jordan | Priya and Sam | |
|---|---|---|---|
| Situation | Divorce decree executed in 2016; pays $2,000 a month in alimony; decree modified in 2025 to increase payments, with no statement about the new rules | Divorce decree executed in 2020; receives $1,500 a month in alimony and $800 in child support | Divorced in 2025; their son lived with Priya 220 nights and with Sam 145 nights |
| Result | Kim can still deduct the alimony; the recipient reports it as income | Nothing is taxable to Jordan or deductible by the payer | Priya is the custodial parent. She can sign Form 8332 so Sam claims the child tax credit, but Priya keeps head of household status and the earned income credit if she qualifies |
Common mistakes
- Deducting alimony under an agreement executed after 2018.
- Treating child support as alimony.
- Both parents claiming the same child, or the noncustodial parent claiming head of household.
- Forgetting to attach Form 8332 each year.
- Cashing out a spouse's share of a retirement account instead of using a QDRO or a direct transfer.
- Filing jointly after the divorce became final.
Divorce agreements involve both state family law and federal tax law. Have a family law attorney and a tax professional review support terms, property division, and retirement account orders before you sign.