Who pays the tax on alimony? My mediator (female), who I believe is working to ensure my wife gets the best deal, is stating that the payor would gross up the payment. So if the payee was expecting $1000/mo and 25% tax bracket the payor would actually pay $1250. I think she is being dishonest. I think this might be negotiated, but I’ve seen nothing that says I would be responsible for paying the taxes for my wife by grossing up the payment.
Generally the spouse paying alimony is able to deduct that money from their income on their tax returns.
Generally the spouse receiving alimony must include that money as their income on their tax returns.
Check out our article Is Alimony Taxed? for detailed information.