Is alimony taxable to the recipient in some states?
Yes, alimony is taxable to the recipient in some states, including California. California alimony law is similar to that of federal law regarding taxation. The recipient of alimony is taxed under the federal law as “income”. In California, the payer of alimony is required to report the payment to the Internal Revenue Service (IRS) and the payee must report the income on their income tax return. The payer of alimony is also entitled to claim a deduction on their taxes, as long as the payments meet certain requirements set by federal law. The deductibility of alimony in California depends on the nature of the payments, and must meet certain tests in order to be allowed as a federal income tax deduction for the payer. Alimony must be paid in cash and must be required by a court or agreement. Additionally, the alimony payments must be made in a timely manner and on a regular basis. They must also cease upon the death of either party. In addition, alimony must not be designated as “child-support” or “property settlement” payments, or the payments will not be deductible. In California, alimony is taxable to the recipient and deductible from the payer’s income tax. When these payments are made, the payer must issue a 1099-MISC to the recipient for the amount of alimony paid. The recipient must also report the income on their income tax return.
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