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Sandi Hargrove, SkyHawks
Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience:  I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
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Is military retirement paid to an ex spouse tax deductible

Customer Question

We pay a portion of my husband's military retirement pay to his ex spouse. Divorce was 1987 in state of CA. (We live in Virginia now). Before the retirement income, paid alimony for approximately 1 1/2 years, along with child support. Divorce settlement was that he was to pay 12/20th of 1/2 of his retirement to her and that it was 'her property.' Also, does she have to declare it as income ? Thank you. Please cite IRS regs as to the answer -
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

The federal law did not allow retired pay to be treated as joint property - please see for reference - http://caselaw.lp.findlaw.com/scripts/printer_friendly.pl?page=us/453/210.html

The Uniformed Services Former Spouse Protection Act (USFSPA) of 1982 allows state courts to treat disposable retired pay either as property solely of the member, or as property of the member and his spouse in accordance with the laws of the state court.

For the Department of Defense (DOD) to make direct payments of a military member's retired pay to the former spouse, the following must be met:

  • (1) The ex-spouse must have been married to the military member for a period of at least 10 years, with at least 10 years of the marriage overlapping a period of military service creditable to retired pay.
  • (2) Direct payments will not be made for division of retired pay in excess of 50% (If there is more than one divorce, it's first come, first serve -- no more than 50% will be paid as division of retired pay).
  • (3) Disability pay is not subject to division as property. It is subject to garnishment for alimony or child support, however.
  • (4) Alimony or child support can be paid in addition to division of retired pay. In this event, DOD Finance will not pay over 65% of an individual's disposable retired pay for property division and alimony/child support.
Customer: replied 7 years ago.
I already knew all of this. My question was - is it deductible as alimony on our Federal Tax return. Thank you, XXXXX XXXXX need this question answered specifically before accepting the answer as acceptable.
Customer: replied 7 years ago.
Hopefully you received my previous reply - that I already knew what you sent me in the first round. I need to know if this payment is deductible on our tax return as alimony. Thanks again !
Expert:  Sandi Hargrove, SkyHawks replied 7 years ago.

The amount looks as if it was treated in the divorce as a property settlement since alimony was seperately stated and ended on a specific time period.

The deduction is not alimony. It is not deductible by your husband not is it taxable by his spouse. If the payment is made directly to him and he forwards the amount to the ex spouse, he will be taxed on the distribution as a pension. If the payment is made directly from the pension to the ex spouse, she will be taxed on the distribution as if it were her own account.

Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience: I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
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