Stack of $100 bills labeled "alimony" next to judge’s gavel on wooden table.

Is Alimony Taxable in Georgia? Here’s What You Need to Know

Going through a divorce can feel like you’re constantly being handed decisions you didn’t ask for, especially when it comes to finances. If you’re trying to make sense of what alimony payments mean for your taxes, you’re not alone.

One of the most common questions we hear from clients in Georgia is: Is alimony taxable?

The answer depends on a few factors, including when your divorce or separation agreement was finalized and how it was structured. Understanding the difference between older and newer tax laws can make a real difference in how you plan your financial future, whether you’re the one paying or receiving alimony or separate maintenance.

Let’s walk through what the law says, how alimony payments are treated under federal and Georgia tax rules, and what that means for you.

Alimony vs. Child Support: Different Tax Rules

Before getting into taxes, it helps to separate alimony from child support. While both are forms of financial support, they’re treated very differently under the tax code.

Note that child support payments are never considered taxable income to the recipient and are not tax-deductible for the person paying. Conversely, alimony or separate maintenance used to have tax consequences, but recent changes in federal law shifted how these payments are treated.

The Big Change & New Rules: Federal Law After 2018

Historically, the person paying alimony could deduct alimony from their federal tax return, and the recipient spouse had to report alimony as income. That all changed with the Tax Cuts and Jobs Act (TCJA) passed by Congress.

For divorce or separation agreements executed after December 31, 2018, alimony is not tax-deductible for the payer. At the same time, the recipient spouse does not have to report alimony as taxable income on their federal tax returns.

In other words, under current federal tax law, alimony is now treated more like child support—no deduction for the payer, and no income for the payee.

Does Georgia Tax Alimony Payments?

When it comes to state income taxes, Georgia follows the federal government’s lead.

If your divorce decree, separation agreement, or written separation agreement was finalized after 2018, alimony is not considered taxable income by either the federal or Georgia state government.

If your agreement was finalized before January 1, 2019, then the old rules apply—meaning the paying spouse can still deduct alimony, and the receiving spouse must report alimony as income.

It’s important to review your divorce agreement carefully. Some agreements modified after 2018 may have opted into the new law, while others retained the old tax treatment.

What Counts as Alimony—or Doesn’t?

Not every payment to a former spouse qualifies as alimony. According to IRS guidelines, to be treated as alimony under pre-2019 federal tax rules, the payment must:

  • Be made in cash payments (not property or services)
  • Be under a divorce or separation instrument
  • Stop when the recipient spouse dies
  • Not be classified as child support or a property settlement

Voluntary payments, noncash property settlements, or shared bills while living in the same household typically do not count as alimony for tax purposes.

Should You Talk to a Tax Professional?

Even with a clear understanding of current tax implications, spousal support taxes can still carry long-term consequences, especially when retirement accounts, claiming dependents, or community property income are involved.

Whether you’re the paying spouse or the receiving spouse, working with a tax professional can help you fully understand how alimony payments apply to your financial interests and avoid surprises when filing your tax return.

Common Mistakes to Avoid with Alimony and Taxes

Whether you’re the person paying or the recipient spouse, the way alimony payments are handled on your tax return can have lasting financial effects. 

Unfortunately, many people make avoidable mistakes when dealing with the tax treatment of alimony or separate maintenance. Here are some of the most common errors to watch out for:

Mistake #1: Assuming All Alimony Is Taxable or Deductible

One of the biggest misunderstandings is assuming that alimony payments are still considered taxable income to the recipient and tax-deductible for the payer. This was true under federal law for decades, but as we already touched on, the Tax Cuts and Jobs Act changed everything.

Misapplying these rules can lead to problems when filing your federal tax returns, including unexpected tax liabilities or IRS scrutiny.

Mistake #2: Mislabeling Payments That Don’t Qualify as Alimony

Not every payment made to a former spouse counts as alimony under IRS guidelines. For example:

  • Noncash property settlements, like handing over a car or transferring ownership of a home, do not count as alimony.
  • Voluntary payments, made without a written separation agreement or divorce decree, are generally not considered alimony for tax purposes.
  • Payments made while both parties are still living in the same household typically don’t qualify either.

Mislabeling these kinds of payments can result in tax penalties or denied deductions.

Mistake #3: Overlooking Modifications to Older Agreements

Some people don’t realize that modifying a pre-2019 divorce agreement can change the tax status of their alimony payments.

If your separation agreement was finalized before 2019, but you modified it after 2018 and the new agreement expressly states it follows the updated federal law, the tax treatment changes. The recipient spouse may no longer need to pay taxes on alimony, and the paying spouse may lose the ability to claim a tax deduction.

Failing to recognize this change, or not including the right language in your updated agreement, can lead to serious tax consequences.

Mistake #4: Not Keeping Records

It may seem basic, but failing to document your alimony payments (including dates, amounts, and proof of transfer) can create major headaches. Whether you’re trying to prove payments were made or received, good records help protect your financial interests in the event of a dispute or audit.

Avoiding these common mistakes can save you time, stress, and money, especially when filing your taxes or negotiating the terms of a divorce or separation agreement. If you’re unsure how these rules apply to your situation, speak with a Georgia family law attorney or a trusted tax professional ASAP. 

Plan for Alimony and Taxes With Our Law Firm

While federal and state tax codes have taken a simpler approach to alimony or separate maintenance post-2018, these laws still vary depending on the timing and language of your divorce or separation. Knowing how your alimony payments are treated (for better or worse) can help you better plan for the future.

If you’re dealing with a divorce agreement, worried about tax consequences, or simply want to protect your financial well-being, the Edwards Law Group is here to help. Our team helps Georgia residents move through the process painlessly while looking out for their long-term interests. Contact us today to schedule a consultation. If you’re in the beginning stages of separating, we highly recommend checking out our Divorce Preparation Guide for Atlanta Residents.