What are the tax implications for a military divorce?

The tax implications for a military divorce in Wisconsin can vary depending on the situation. Generally speaking, in a divorce, the court may grant either spouse a portion of the other spouse’s military retirement benefits. Tax implications in this type of situation depend on when the payments are made. If retirement payments are made after the divorce is finalized, those payments are usually taxable to the receiving spouse. In addition, there are specific tax implications that can apply to military divorce related to the rules for separating the military retirement pay received by one spouse. For example, if the receiving spouse is awarded a portion of the other spouse’s military retirement pay, the receiving spouse must pay taxes on the payments they receive. Depending on the situation, the receiving spouse may also be liable for federal and state income taxes on that portion of the military retirement pay. Also, certain types of property settlements, such as alimony and child support, are taxable income to the receiving spouse and deductible by the paying spouse. The paying spouse would then need to accurately report this information on their taxes. As military divorce is a complex and specialized area of law, consulting a qualified attorney is recommended to ensure that all tax implications are taken into account.

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What are the tax implications for a military divorce?

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