Alimony

Alimony (sometimes called spousal support or maintenance) is money one spouse pays to the other after a divorce or separation. Whether alimony counts toward your income for Marketplace purposes depends on when your divorce agreement was finalized.

For divorce agreements executed before January 1, 2019, alimony is taxable income for the recipient and a deductible expense for the payer. This means if you receive alimony under an older agreement, it increases your AGI and MAGI, which affects your Marketplace subsidy eligibility.

For divorce agreements executed on or after January 1, 2019, alimony is not taxable income for the recipient and not deductible for the payer (under the Tax Cuts and Jobs Act). If your agreement falls under the new rules, alimony you receive does not count toward your AGI, MAGI, or Marketplace income; it won't affect your subsidy calculations.

This distinction matters when you're estimating income for your Marketplace application. If you receive alimony under a pre-2019 agreement, include it as income. If your agreement is from 2019 or later, don't.

Getting divorced is also a qualifying life event that triggers a Special Enrollment Period. If your divorce changes your household size, income, or access to health coverage, update your Marketplace application promptly. A change from filing jointly to filing individually, combined with alimony income adjustments, can significantly shift your subsidy eligibility.