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IRS.gov Website
Publication 17
taxmap/pub17/p17-097.htm#en_us_publink1000172912

Recapture Rule(p134)

rule
If your alimony payments decrease or terminate during the first 3 calendar years, you may be subject to the recapture rule. If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. Your spouse can deduct in the third year part of the alimony payments he or she previously included in income.
The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. Do not include any time in which payments were being made under temporary support orders. The second and third years are the next 2 calendar years, whether or not payments are made during those years.
The reasons for a reduction or termination of alimony payments that can require a recapture include:
taxmap/pub17/p17-097.htm#en_us_publink1000172913

When to apply the recapture rule.(p134)

rule
You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year.
When you figure a decrease in alimony, do not include the following amounts.
taxmap/pub17/p17-097.htm#en_us_publink1000172914

Figuring the recapture.(p134)

rule
You can use Worksheet 1 in Publication 504 to figure recaptured alimony.
taxmap/pub17/p17-097.htm#en_us_publink1000172915

Including the recapture in income.(p134)

rule
If you must include a recapture amount in income, show it on Form 1040, line 11 ("Alimony received"). Cross out "received" and enter "recapture." On the dotted line next to the amount, enter your spouse's last name and social security number.
taxmap/pub17/p17-097.htm#en_us_publink1000172916

Deducting the recapture.(p134)

rule
If you can deduct a recapture amount, show it on Form 1040, line 31a ("Alimony paid"). Cross out "paid" and enter "recapture." In the space provided, enter your spouse's social security number.