Taxes the year you divorce: filing status, children and alimony

Filing status: it's decided on December 31

If you have a final divorce decree by the last day of the year, you file as unmarried for the whole year. If you're only separated, without a final decree, you're considered married for the whole year and file jointly or as married filing separately.¹

That makes the timing of the final decree matter. A divorce that becomes final on December 31 changes the whole year's return, not just the last day. Talk to a tax professional before you schedule the final hearing near year-end.

Head of household

Head of household usually means lower tax than filing single. To qualify, you must be unmarried, or considered unmarried, on the last day of the year, pay more than half the cost of keeping up your home, and have a qualifying person living with you for more than half the year.¹

You can be considered unmarried even before the divorce is final if you file a separate return, pay more than half the cost of the home, your spouse didn't live there during the last 6 months of the year, and your home was your child's main home.¹

Which parent claims the children

For tax purposes, the custodial parent is the one the child lived with for the greater number of nights during the year.¹

The custodial parent can let the other parent claim the child-related credits by signing Form 8332 or a similar statement. That release doesn't move other benefits, such as head of household status, the earned income credit or the dependent care credit, which generally stay with the custodial parent.¹

A settlement agreement often says who claims the children in which years. Make sure it matches how the IRS rules work, so both parents can actually follow it.

Alimony and child support

• Alimony under a divorce or separation agreement signed after 2018 isn't deductible for the payer and isn't income for the recipient.¹
• Older agreements can follow the earlier rules, where alimony was deductible and taxable, unless they're changed and the change says the new rules apply.²
• Child support isn't deductible for the parent who pays it and isn't taxable for the parent who receives it.¹

Dividing property

Transferring property to your spouse or former spouse as part of the divorce generally isn't taxed. The spouse who receives it takes over the original owner's tax basis, which matters when they later sell.¹

A transfer counts as part of the divorce if it happens within 1 year after the marriage ends, or if it's required by the divorce decree or agreement and happens within 6 years.¹

Retirement accounts have their own rules. Dividing a 401(k) or pension usually needs a separate court order to avoid taxes and penalties.

Dividing retirement accounts in a Georgia divorce

Related guides

• How alimony works in Georgia
• How child support works in Georgia
• Dividing property and debts