What happens to your federal employee benefits in divorce?

HomeWhat happens to your federal employee benefits in divorce?
What happens to your federal employee benefits in divorce?

If you earned more than your spouse and filed joint returns, you may pay higher tax rates after your divorce, since more of your income falls into higher brackets. But if you earned less than your spouse, your individual income may put you back into a lower tax bracket.

Q. Are there tax advantages to getting divorced?

You can deduct alimony you pay to an ex-spouse if the divorce agreement was in place before the end of 2018. Otherwise, it’s not deductible (or taxable to the recipient). You also lose the deduction if the agreement is changed after 2018 to exclude the alimony from your former spouse’s income.

Q. Is divorce settlement tax deductible?

Lump sum payments of property made in a divorce are typically taxable. Likewise, the payments were taxable income for the spouse who receives the payments. A recent change to the tax code did away with that, however. Now those payments are no longer deductible.

If you’re the spouse who is paying alimony, you can take a tax deduction for the payments, even if you don’t itemize your deductions as long as your divorce agreement was finalized prior to 2019. Your ex-spouse, meanwhile, must pay income tax on the amounts that are deducted.

Q. Do you pay higher taxes after a divorce?

Former spouses of federal employees or retirees may not continue to receive FEHB coverage under the employee or retiree’s enrollment after divorce. OPM will not honor a court order requiring it to provide FEHB coverage to a former spouse, because federal law preempts state law in matters relating to the nature and extent of coverage or benefits.

Q. Do you get spousal benefits when you get a divorce?

While a married spouse must wait for their husband or wife to claim benefits to receive spousal checks, that’s not the case for divorcees. “When divorced, you don’t have to wait until your ex turns on Social Security,” Kovar says.

Q. How to file a separate tax return after a divorce?

1 You need to file a separate return . 2 You must have paid more than half the cost of keeping up your home . 3 You must have lived apart from your spouse for the last six months of the tax year. 4 You must be able to claim your child as a dependent , including stepchildren and foster children. 5 Your home must be the main home of your child .


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