What Are the Differences Between Alimony & Child Support?
Financial situations both during and after a divorce can get very messy very quickly, whether it is paying off mutual debts or deciding who will take ownership of the marital home. One of the most frequent financial issues to arise are those of alimony and/or child support, and whether or not a spouse is entitled to receive that support. It is also quite common for a spouse to not even know the difference between alimony and child support, regardless of whether they are the ones paying or receiving it. Here, the Bel Air divorce attorneys at Rodier Family Law outline the key differences between alimony and child support, possible obligations, and how seeking the assistance of a trusted divorce attorney can be extremely beneficial.
What is Alimony?
Before one can even compare alimony and child support, they must understand the basics of alimony in a divorce. Alimony is the amount paid from one spouse to another during or following the divorce and is intended to help the recipient maintain a lifestyle similar to that of when they were married. It is important to note that alimony is never received automatically—the recipient must request it unless the parties reach an agreement.
With regard to alimony payments, a judge could order payments to be made periodically for a specific amount of time or indefinitely until the recipient remarries. Alimony payments also vary depending on a multitude of factors including the following: the age of each spouse, the income and employment situation of each spouse, the division of assets in the divorce, individual living expenses, the reasons leading to the breakup of the marriage, the parties’ financial circumstances and the length of the marriage. Alimony may also be adjusted after the divorce regarding certain situations.
Tax Treatments & IRS Rules Concerning Alimony
Depending on whether or not you pay or receive alimony, the treatment for tax purposes will differ. Due to the Tax Cuts and Jobs Act, if your divorce was finalized before December 31, 2018, the alimony payments made to your spouse are generally tax-deductible. However, if your divorce was finalized after December 31, 2018 and you are making alimony payments, they are generally not tax deductible. The party receiving the alimony also does not have to claim the alimony as income. Additionally, the IRS has instituted several requirements that must be met in order for payments to be considered alimony, as well as deductible for those whose divorce agreements were finalized before December 31, 2018.
In order to qualify as alimony, the spouse making the payments must not file a joint tax return with the recipient spouse, payments must be made in cash, check, or money order and they must be owed by a divorce or separation agreement. Furthermore, the agreement should not categorize the payments as not being alimony, there should be no liability to continue the payments if the recipient were to die, and the spouses should not live in the same household when the payments are being made.
Alimony Versus Child Support
The key difference between alimony and child support is the intended purpose of each of the payments. Alimony is paid for the benefit of the spouse while child support is paid for the benefit of any children, whether the parties were married or not, in order to support their basic needs such as food, clothing, housing, and medical care. Child support is not considered taxable income for the recipient or deductible for the party who provides it, since it is intended to benefit the children.
However, when it comes to parents claiming children as dependents on their taxes, there are some key points to consider. In most cases, the parent who the child lives with for the majority of the year is able to claim the child as a dependent, assuming all other dependent requirements are met. The finalized custody agreement or court order, as well as state law, will determine how child support is to be paid, how much the payments will be, and how long the support will last.
Consult with a Harford County Divorce Attorney at Rodier Family Law To Learn More
If you are currently experiencing a divorce and the financial complexities that come with it, you may still be experiencing some confusion when it comes to comparing alimony and child support. Seeking out the guidance from an experienced and knowledgeable divorce attorney can provide you with the expertise and support you need to ensure that you are taking the best course of action. Whether it is requesting or paying child support, the trustworthy divorce attorneys at Rodier Family Law are here to navigate you through every step of the process. To consult with one of our attorneys regarding your financial support, contact our Bel Air office today.