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Do I have to pay income tax on settlement from my divorce?
Asked on June 16, 2009 under Family Law, Minnesota
B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
There are a few variables here, so for detailed tax advice, based on your individul case, you should talk with your tax preparer or a CPA.
In most cases, divorce is not a taxable event. Most transfers of interests in property, and lump sum payments, to do a division of property for divorce or in a settlement agreement, are not taxable income. Child support is not tax-deductible to the person paying it, and it is not income to the parent receiving it. Alimony is the exception: it is taxable income, and it is deductible from income for the person paying it.