Are Unallocated Support Payments Taxable Or Non-Taxable To The Spouse Making The Payments?
Sometimes in divorce cases, a court will order a spouse to make unallocated support payments to the other spouse. These payments are similar to alimony payments, but they are a little different because an unallocated payment is usually used for not only supporting the spouse but they can also for child support or for the payment of other bills. Alimony is generally taxable to the spouse receiving the payment of alimony and tax deductible for the spouse paying the alimony. Likewise, unallocated support is taxable to the supported spouse and deductible by the supporting spouse unless the court issues an order stating otherwise.
For a more in-depth look at this issue read the case of Brown v. Brown, 375 S.C. 48, 650 S.E.2d 84 (2007). Every case is different so you need to talk with an attorney or a tax professional to discuss your specific situation.