Alimony Recapture was developed by Congress to prevent divorcing parties from disguising property settlement payments as alimony.

Recapture can only happen in the third post decree year.  If payments in the third year exceed those of the second year by more than $15,000, and those of the first year exceed payments in the second year by more than $7,500, then the parties will be subject to alimony recapture.

If this occurs, then the paying spouse must report the alimony recapture amount as income and the receiving spouse may deduct a like amount from his/her Adjusted Gross Income.

There are only three exceptions for payments that are not considered as alimony for the purposed of alimony recapture:

1. Temporary Support Orders

2. Payments that are a fixed percentage of income that fluctuates, such as income from a business or sales commissions.

3. Payments that terminate because of death or remarriage.

The following spreadsheet can be used to compute excess alimony.