Ted and Alice divorced in 2014.Pursuant to the divorce decree,Ted pays $5,000 alimony and $7,500 child support to Alice every month.Alice is the custodial parent.Which of the following statements is true?

Question

Quizplus · Accepted Answer

Under the tax law changes effective from 2019, alimony payments are not deductible by the payer nor taxable to the recipient for divorces finalized after December 31, 2018. However, since Ted and Alice divorced in 2014, the old rules apply: Ted can deduct alimony payments, and Alice must include them in her income. Child support is neither deductible by the payer nor taxable to the recipient. Ted is not automatically entitled to child credits just because he pays child support.

Ted and Alice Divorced in 2014