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Per IRS Publication 504 Divorced or Separated Individuals, on page 16:

Recapture of Alimony

If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. If you are subject to this rule, you have to include in income (in the third year) part of the alimony payments you previously deducted. Your spouse can deduct (in the third year) part of the alimony payments he or she previously included in income.

The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. Don’t include any time in which payments were being made under temporary support orders. The second and third years are the next 2 calendar years, whether or not payments are made during those years.

The reasons for a reduction or end of alimony payments that can require a recapture include:

  • A change in your divorce or separation instrument,
  • A failure to make timely payments,
  • A reduction in your ability to provide support, or
  • A reduction in your spouse's support needs.

When to apply the recapture rule. You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year.

When you figure a decrease in alimony, don’t include the following amounts.

  • Payments made under a temporary support order.
  • Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment.
  • Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year.

How to figure and report the recapture. Both you and your spouse can use Worksheet 1 to figure recaptured alimony.

Including the recapture in income. . If you must include a recapture amount in income, show it on Schedule 1 (Form 1040), line 2a (“Alimony received”). Cross out “received” and enter “recapture.” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN.

To enter alimony received:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Other Income in the Federal Quick Q&A Topics menu to expand, then click Alimony received.
  3. Continue with the interview process to enter all of the appropriate information.

Deducting the recapture. If you can deduct a recapture amount, show it on Schedule 1 (Form 1040), line 18a (“Alimony paid”). Cross out “paid” and enter “recapture.” In the space provided, enter your spouse's SSN or ITIN.

To enter alimony paid as a deduction adjustment on Schedule 1 (Form 1040 or 1040-SR) Additional Income and Adjustments to Income, Line 18a:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Other Adjustments in the Federal Quick Q&A Topics menu to expand, then click Alimony paid.
  3. Continue with the interview process to enter all of the appropriate information.

Since you would need to enter "recapture" for alimony recaptured in income on Line 2a, or for an alimony deduction on Line 18a, you would need to print your return to manually write "recapture" on the appropriate line, and then mail your return to the IRS.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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