Blog · 16 October 2026

States That Tax Alimony: Topic 452, the 2019 Instrument-Date Rule and State Conformity for US CPA Firms

By Keshav Bansal, CA

Is alimony taxable? For federal purposes the answer turns on one date: when the divorce or separation instrument was executed. For state purposes it turns on something else entirely — how each state hooks into the Internal Revenue Code. The Cusp’s “Which states still tax alimony” (published August 30, 2026, updated October 7, 2026) went looking for the states that tax alimony the IRS now ignores and found four, each for a different reason. This guide checks those findings against IRS Topic 452, Publication 504 and the states’ own guidance, for US CPA firms preparing returns and modeling support.

The federal rule: the instrument date decides

The Tax Cuts and Jobs Act (P.L. 115-97, §11051, December 22, 2017) repealed §71 (inclusion) and §215 (deduction) for any divorce or separation instrument executed after December 31, 2018. IRS Topic 452 (reviewed September 24, 2026) states the current position: alimony is generally deductible by the payer and includible by the recipient if paid under an agreement executed before 2019, and is neither deductible nor includible under an agreement executed after 2018.

A pre-2019 instrument can move into the new regime, but only on purpose. Publication 504 says the post-2018 rules apply to a pre-2019 instrument modified after 2018 “if the modification expressly states that the alimony isn’t deductible to the payer or includible in the income of the recipient.” Its own example: a December 2, 2016 decree modified on May 16, 2025 to increase payments, without that language, stays under the old rules for all 2025 payments. Had the modification adopted the new rules, January–May payments would remain deductible and includible, and June–December payments would not.

Not every payment is alimony. Topic 452 requires, among other things, cash payments, no joint return between the spouses, no liability to pay after the recipient’s death, and that the payment isn’t child support or a property settlement. Child support is never deductible or income, and if the payer underpays a combined obligation, payments apply to child support first.

Reporting pre-2019 alimony correctly

• Payer. Deduct on Schedule 1 (Form 1040), line 19a, whether or not the client itemizes (Topic 452). Pub. 504 adds the recipient’s SSN or ITIN on line 19b and the month and year of the original agreement on line 19c.
• Missing number. Without the recipient’s SSN or ITIN, the deduction may be disallowed and the payer may owe a $50 penalty. The recipient who doesn’t give the payer that number may also owe $50.
• Recipient. Report on Schedule 1, line 2a, with the original agreement’s month and year on line 2b (Form 1040-NR filers use Schedule NEC).
• Recapture. For instruments executed after 1984 but before 2019, Pub. 504’s recapture rule can apply in the third year if payments drop by more than $15,000 from the second year or fall significantly from the first.

Why a state can tax what the IRS ignores

Most state returns start from federal AGI, so alimony that never reaches a 1040 never reaches the state return either. Conformity comes in flavors: rolling states follow the Code as currently amended, fixed-date states follow it as of a stated date, and a few write item-specific rules of their own. The Cusp counts 4 decoupled states, 37 where the federal answer is the whole answer, and 9 with no income tax. It also notes the mirror image: in a state like Connecticut, which starts from federal AGI, a recipient under an unmodified pre-2019 order is still taxed on alimony because it is still in federal AGI. (For another example of how conformity dates drive state outcomes, see our South Carolina IRC conformity guide.)

The four states that still tax alimony

New York: deliberate decoupling

NY TSB-M-18(6)I (December 28, 2018) says New York opted not to follow the TCJA change for agreements “executed or modified after December 31, 2018.” When computing New York AGI, taxpayers subtract alimony paid from federal AGI and add alimony received, with alimony defined under IRC §71 as it existed on December 21, 2017 (Tax Law §612(w)).

New Jersey: never coupled

New Jersey’s Gross Income Tax lists its own categories of income, and alimony is one: “Alimony is taxable to the recipient under State law N.J.S.A. 54A:5-1(n),” per the Division of Taxation guide Divorcing Your Spouse. The 2025 NJ-1040 instructions put court-ordered alimony received on Line 25 and payments made on Line 32. The guide adds that alimony may be treated as nontaxable where the decree stipulates the payer won’t claim the deduction, and that recipients may need estimated payments or a new NJ-W-4 because alimony has no withholding.

California: decoupled, then conformed for 2026

The FTB’s alimony page (last updated January 7, 2026) says: “We do not conform to the federal Alimony changes effective January 1, 2019, through December 31, 2025.” For agreements signed in that window, the recipient includes and the payer deducts through a Schedule CA adjustment. Under SB 711 (2025–2026), instruments executed on or after January 1, 2026 follow federal treatment with no adjustment, and an instrument executed on or before December 31, 2025 switches only if a later modification expressly provides that the SB 711 amendments apply.

Arkansas: a 1987 snapshot

Ark. Code §26-51-417 adopts 26 U.S.C. §71 and §215 “in effect on January 1, 1987” for inclusion and deduction. Because the reference is frozen, the 2017 repeal never reached it. The Cusp reports that the Arkansas Department of Finance and Administration confirmed this in correspondence, and that in its October 7, 2026 update an examiner said even post-2018 alimony is taxable to the recipient and deductible on the AR1000ADJ. The Cusp notes these are examiner replies, not a published ruling.

Two near-misses: Alabama and Pennsylvania

The Cusp reads Alabama’s undated cross-references to §§71 and 215 as following the federal sections “to zero” — nothing includable, nothing deductible — while stressing that this is its reading of the statute, not Alabama Department of Revenue guidance. Pennsylvania does not tax alimony, but its Tax Forgiveness guide (REV-631) lists “alimony and spousal support” among non-taxable income that still counts toward eligibility income, so a recipient can lose some or all of the credit.

Preparer checklist

• Get the instrument and every modification; record the execution date and any express “new rules” language.
• Confirm the client’s state of residence for each year of payments, and part-year rules.
• In NY and NJ, expect state-only income or deductions regardless of instrument date; in CA, sort instruments into pre-2019, 2019–2025 and 2026+ buckets.
• Ask for the recipient’s SSN or ITIN on any deductible return, federal or state.
• Model support offers on both federal and state after-tax figures before terms are signed.
• Recheck fixed-date states when Congress changes the Code.

Divorce returns often raise filing-status and liability questions too; see our guides on valid joint returns after Daidone and innocent spouse relief after Hasznos.

Where Tax Brew fits

Multi-state divorce returns mean decree reviews, state adjustment schedules and side-by-side projections. Tax Brew provides bookkeeping, cleanup and tax prep support for US CPA firms, with the first 20 hours free for qualifying engagements, while your team keeps the review, advice and sign-off. See our services, or email info@taxbrewglobal.com.

Sources: IRS Topic 452 (reviewed Sept. 24, 2026); IRS Publication 504 (2025); 26 U.S.C. §71 and §215 (Cornell LII); NY TSB-M-18(6)I; NJ Division of Taxation, Divorcing Your Spouse and 2025 NJ-1040 Instructions; California FTB, Alimony (updated Jan. 7, 2026); Ark. Code §26-51-417; PA REV-631, Tax Forgiveness; The Cusp, “Which states still tax alimony” (Aug. 30, 2026; updated Oct. 7, 2026). General information, not tax or legal advice.