Spousal support, alimony pendente lite (support during the pendency of the divorce action) and alimony payments (support after the entry of the divorce decree) are treated as taxable income to the payee and deductible to the payor for tax purposes. However, child support payments are neither taxable income to the payee, nor tax deductible to the payor. Court orders that include spousal support or alimony, and child support, are treated as taxable income to the payee and tax deductible to the payor, if such orders are categorized as unallocated. An unallocated order of support is an order of court that does not differentiate the components of the support award (spousal support or alimony and child support). When the order specifically allocates a particular amount as spousal support or alimony, and specifically
allocates a particular amount as child support, only the amount allocated as spousal support or alimony is considered taxable income for the payee and tax deductible to the payor. The amount allocated for child support is not considered taxable income to the payee and not tax deductible to the payor. The Pennsylvania Support Guidelines assume that an order for support will be unallocated. If the support order is allocated, the Court may make appropriate adjustments, taking into consideration the tax effects of the award. Parties should therefore be aware of these tax consequences when negotiating support or alimony and child support awards as part of a settlement or consent order of court.
