Payments over at least 3 calendar years that represent a fixed part of business income such as self employment or employee compensation, or 3. Payments that decrease because of death of either spouse or remarriage of the recipient spouse. Such payments are not taxable to the recipient or deductible by the payer. Payer has little or no gross income from which to deduct alimony. Payer s other deductions exceed gross income.
Payee is in a higher tax bracket than the payer.
Avoidance of recapture rules. Deductible Alimony Vs. Child Support Child support payments are not treated as alimony and therefore are not deductible by the payer spouse and are not income to the receiving spouse. It does not matter whether the event is certain or likely to occur. There are two situations in which payments that would otherwise qualify as alimony will be treated as child support because the payments are reduced at a time presumed to be associated with the happening of a contingency relating to the child.