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How is spousal support taxed?
You receive spousal support
If you receive monthly spousal support, you must pay income tax on the total support you receive each year. And, you can claim a tax deduction on legal fees spent to get monthly spousal support.
But, if you receive all of your spousal support at once in a lump-sum payment, you do not pay income tax on it. And, you cannot claim a tax deduction on legal fees spent to get a lump-sum payment.
You pay spousal support
If you pay monthly spousal support, you get an income tax deduction for the total spousal support you pay each year. You do not get a tax deduction if you make a one time lump-sum payment.
You cannot claim a tax deduction on legal fees spent on defending a claim for spousal support.
Tax rules for child support
The tax rules for child support are different than for spousal support.
Parents paying child support cannot claim an income tax deduction for making child support payments. And, parents receiving child support are not taxed on the support payments they receive.