What Is A Former Spouse Deduction On Military Retirement Pay

The amount of the deduction should be the amount of military retirement income andor survivors benefits included on line 1 of Form IT-40 or 6250 whichever is less.

What is a former spouse deduction on military retirement pay. The Uniformed Services Former Spouses Protection Act USFSPA Title 10 United States Code Section 1408 passed in 1981 accomplishes two things. In the final rule State taxes were added as an authorized deduction based on section 654 of Pub. If both you and your spouse received military retirement income andor survivors benefits you may each claim the deduction for a maximum of 12500 up to 6250 each. CRDP is retired pay.

The former spouse receiving direct payment of military retired pay must report any taxable amount directly to the IRS and make estimated tax payments when appropriate. The former spouse of a member of the military does not forfeit her portion of military retirement pay should he remarry instead the Uniformed Services Former Spouse Protection Act requires that if she begins to receive benefits under the Survivor Benefit Plan upon her former spouses death she will lose those benefits if she remarries before reaching his 55th birthday. The authorized deductions vary based on the date of the parties divorce. Division of Retired Pay In the late 1970s and early 1980s various state courts began to treat military retired pay as community property often awarding a portion of the pay to the former spouse.

The retiring service member can select to cover up to 55 percent of his or her retirement pay with SBP coverage. You have no liability to make the payment in cash or property after the death of your spouse or former spouse. A former spouse may stop payments under the Uniformed Services Former Spouse Protection Act or USFSPA by sending DFAS a letter with the spouses notarized signature withdrawing their application for payments under the USFSPA See Note 5 below. Note 1 - See Department of Defense Financial Management Regulation 700014-R Volume 7B Military Retired Pay Policies and Procedures - Retired Pay Chapter 13 Suspension of Pay Paragraph 130203 Retired Pay Suspended by Secretary of the Military Department Concerned and Paragraph 130503 Survivor Annuity Deductions.

The tax treatment of income received as retirement payments can be complicated. SBP can provide income to a spouse or former spouse with or without children children only or a third party called an insured interest. The Uniformed Services Former Spouse Protection Act defines community property payments established in accordance with a court order and approved by the DFAS legal department as pre-tax deductions. A payment in the nature of a division of community property is not.

Under this law former spouses may be entitled to portions of the military members retirement pay medical care and exchange and commissary benefits. Under USFSPA despite the amount awarded to a former spouse there is a maximum of 50 of the disposable retired pay that DFAS-CL will pay directly 65 for child support garnishment orders. The Uniformed Services Former Spouse Protection Act. One such case from California finally wound its way through the federal courts to the Supreme Court who ruled in McCarty v.

And Your payment is not treated as child support. Under USFPA DFAS will pay a former spouse the court ordered amount up to the 50 limit. Your share of your ex-husbands military retirement is considered alimony deductible by him and reportable by you. Your designation of DFAS is ambiguous as is the nature of your retirement payments.

The USFSPA provides a method of enforcing current andor previously. The Uniformed Services Former Spouse Protection Act is a federal law that provides certain benefits to former spouses of military members. On a related tax note a former spouse receiving or trying to get a share of military retired pay should always be advised about the possible deduction of legal fees for work done on obtaining a portion of the military pension. DFAS will construe all percentage awards as a percentage of disposable retired pay which is gross retired pay less authorized deductions.

A former spouse must have been awarded a portion of a members military retired pay in a State court order. The retiree is not liable for taxes on payments made to their former spouse. The principal deductions now include retired pay waived to receive VA disability compensation disability retired pay and Survivor Benefit Plan SBP premiums where the former spouse is elected as the former spouse beneficiary. SBP coverage costs 65 percent of the base covered amount.

You may deduct from income the amount of alimony or separate maintenance you paid and you must include in income the amount of alimony or separate maintenance you received.