The tax impact of alimony differs by type and situation. Spousal alimony has tax benefits and obligations, while child alimony is tax neutral.
Tax Rules Spousal Alimony
| Party | Tax Rule |
|---|---|
| Payer | Deductible as personal deduction |
| Recipient | Taxable as income in box 1 |
Buyout of Spousal Alimony
If spousal alimony is bought out in one go, there are two options:
- Periodic payment: Deductible for the payer, taxable for the recipient
- Capital settlement: No tax impact
The exact tax treatment depends on the agreements in the divorce settlement.
Child Alimony and Tax
No tax rules apply to child alimony:
- No deduction for the payer
- No tax for the recipient
Financial Impact
Due to the deductibility of spousal alimony:
- The payer receives a tax refund
- The net costs are lower than the gross amount
- The recipient receives net less than the gross amount
Net Calculation Alimony
| Payer (e.g. 37% rate) | Recipient (e.g. 19% rate) | |
|---|---|---|
| Gross amount | € 1.000 | € 1.000 |
| Tax effect | - € 370 (refund) | - € 190 (tax) |
| Net result | Costs € 630 | Receives € 810 |
Tax Return and Alimony
Spousal alimony must be reported in the income tax return:
- Payer: under 'maintenance expenses'
- Recipient: under 'received family law benefits'
Should I keep documents?
Yes, keep payment proofs and the settlement. The Tax Authorities may request proof up to 5 years later.What if I receive alimony via the LBIO?
The LBIO provides an annual statement that you can use for your tax return. It lists the received amount.Can I request a provisional tax refund?
Yes, as a payer of spousal alimony, you can arrange a provisional refund. This provides monthly tax benefits instead of afterwards.Frequently Asked Questions about Alimony in Utrecht
Can I deduct spousal alimony for tax purposes?
Yes, as payer, spousal alimony is deductible in box 1. The benefit depends on your tax rate. Keep documentation, as the Tax Authorities may request proof.
Do I need to declare received alimony?
Yes, you must declare spousal alimony as income in box 1. If received via the LBIO, use their annual statement as proof.
What are the tax rules for buyout?
The tax consequences of a buyout depend on the settlement. As a periodic payment, it is deductible and taxable; as a capital division, it is not. Have this checked by an expert.
Can I get monthly tax benefits?
Yes, via a provisional refund, you receive part of the benefit monthly as payer. You can apply for this via the Tax Authorities.
Does child alimony have tax consequences?
No, child alimony is not deductible for the payer and not taxable for the recipient, unlike spousal alimony.
Local Information Utrecht:
- District Court Midden-Nederland, Vrouwe Justitiaplein 1
- Legal Aid Office Utrecht, Catharijnesingel 55