Steve talks about Modified Adjusted Gross Income Line 37*

IRS Publication 504 - Divorce & Taxes
IRS Publication 504 – Divorce & Taxes
Exemptions - Publication 501
Exemptions – Publication 501
magi.adj_.gross_.income.1040[1]
IRS 1040 Tax Return
Form 8962 Instructions
Form 8962 Instructions
Community Property - Publication 555
Community Property – Publication 555
Covered CA - Countable Sources of Income
Covered CA – Countable Sources of Income – Getting to MAGI and Line 37 AGI

Alimony counts as MAGI income as it’s on Line 11 of your 1040 Tax Return.

Here’s IRS publication 504 on how divorced, separated people show child support, alimony, filing status, exemptions – who gets the child exemptions, QDRO – Qualified Domestic Relations Order, Property Settlements, Costs to get the divorce, Community Property, etc.

MAGI  is defined by the tax code and IRS rules, not Covered CA.

Tax Effects of Divorce or Separation

If you are divorcing or recently divorced, taxes may be the last thing on your mind. However, these events can have a big impact on your wallet. Alimony and a name or address change are just a few items you may need to consider. Here are some key tax tips to keep in mind:

  • Child Support.  Child support payments are not deductible and if you received child support, it is not taxable.
  • Alimony Paid.  You can deduct alimony paid to or for a spouse or former spouse under a divorce or separation decree, regardless of whether you itemize deductions. Voluntary payments made outside a divorce or separation decree are not deductible. You must enter your spouse’s Social Security Number or Individual Taxpayer Identification Number on your Form 1040 when you file.
  • Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it. Alimony is not subject to tax withholding so you may need to increase the tax you pay during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.
  • Who gets the tax deduction for the children?  See Page 9 of Publication 504.  Do they count as members of the household for ObamaCare?
  • Spousal IRA.  If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse’s traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.
  • Name Changes.  If you change your name after your divorce, be sure to notify the Social Security Administration. File Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov or call 800-772-1213 to order it. The name on your tax return must match SSA records. A name mismatch can cause problems in the processing of your return and may delay your refund.  Health Care Law Considerations.
  • Special Marketplace Enrollment Period.  If you lose health insurance coverage due to divorce, you are still required to have coverage for every month of the year for yourself and the dependents you can claim on your tax return. You may enroll in health coverage through the Health Insurance Marketplace during a Special Enrollment Period, if you lose coverage due to a divorce.
  • Changes in Circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace, you may get advance payments of the premium tax credit. If you do, you should report changes in circumstances to your Marketplace throughout the year. These changes include a change in marital status, a name change, a change of address, and a change in your income or family size. Reporting these changes will help make sure that you get the proper type and amount of financial assistance. This will also help you avoid getting too much or too little credit in advance.
  • Shared Policy Allocation. If you divorced or are legally separated during the tax year and are enrolled in the same qualified health plan, you and your former spouse must allocate policy amounts on your separate tax returns to figure your premium tax credit and reconcile any advance payments made on your behalf. Publication 974, Premium Tax Credit, has more information about the Shared Policy Allocation. For more on this topic, see Publication 504, Divorced or Separated Individuals. You can get it on IRS.gov/forms at any time.

IRS Tax Tips provide valuable information throughout the year. IRS.gov offers tax help and info on various topics including common tax scams, taxpayer rights and more.

Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

Child & Related Pages

CA Court Website on Alimony – Spousal Support

2 comments on “Alimony – From a Divorce Settlement – Line 11 & 31

  1. I recently was divorced as of January 6. I have lost my health insurance. I’m on Social Security disability and I get half of my husbands retirement. I did not file income tax last year,and did not want my x to use me as a dependpendt. If I take photos of these documents how do I send them in.

    • This question is more complex then it appears. The first thing is to get a complementary quote. We are building a new pages please use our search feature above to explain how to see if you qualify, get complementary quotes, calculate subsidy level, when you can enroll outside of Open Enrollment, sign up for complementary experienced agent support, etc.

      Here’s instructions on how to upload documents to your Covered CA account. If you appoint us as your agent, no extra charge, we can do that for you.

      You do need to file taxes. You also need to come up with a number for what you expect 2017 MAGI income to be. Line 37, plus Social Security, tax exempt interest and foreign income.

      Check with competent tax counsel on how you should file your 2016 taxes, being as you were still married. Going forward, married couples are mandated to file a joint return, (publication 974 page 4 section 2 c) if they want subsidies aptc.

Leave a Reply

Your email address will not be published.