The alimony recapture rule helps ensure that alimony payments are made as true ongoing support rather than large upfront property settlements disguised as alimony. If alimony payments decrease substantially during the first three calendar years after they begin, part of the payments may need to be “recaptured.” This means the payer may have to include some previously deducted alimony in income, while the recipient may be allowed to deduct that amount.
For steps on entering alimony in TaxAct, see the FAQ Alimony.
If you must include a recapture amount in income, enter it as Alimony received. When you have finished the rest of the return, print it, then cross out “received” and write “recapture.” In the space provided, enter your former spouse's SSN or ITIN. Then you will need to paper-file your return.
If you can deduct a recapture amount, enter it as Alimony paid. When you have finished the rest of the return, print it, then cross out “paid” and write “recapture.” In the space provided, enter your former spouse's SSN or ITIN. Then you will need to paper-file your return.
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