Settlement amount?

Do I have to pay income tax on settlement from my divorce?

Asked on June 16, 2009 under Family Law, Minnesota

Answers:

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.


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