I’m divorced and I pay alimony to my ex-spouse. Does that affect my income for determining eligibility for premium tax credits?

Federal tax rules set out what is included in your household income. Eligibility for and the amount of premium tax credits are largely based on your household income. Check with a tax advisor, but in general, for divorce or separation agreements after December 31, 2018, alimony payments are no longer deductible from the income of the paying ex-spouse, and alimony is not included as income for the recipient ex-spouse.

For pre-2019 divorces, the paying ex-spouse can deduct alimony payments from their income, and the recipient ex-spouse must report alimony payments as income on their federal tax return. However, divorced couples have the option of modifying their pre-2019 divorce agreement to adopt the tax rules in place for divorces that occurred after December 31, 2018.