Alimony vs. Child Support: The Legal Difference

Navigating the financial aspects of a divorce or separation agreement can be complex, especially when it comes to understanding the difference between an alimony arrangement and a child support payment. This article provides valuable insights into alimony vs. child support and their tax implications after a marriage ends.

What is alimony?

Alimony, also known as spousal support, is a financial arrangement where one party provides regular payments to the other to financially support them as part of a divorce settlement or separation. This income helps the spouse receiving payments maintain a similar lifestyle to the one they had during marriage. Alimony payments are separate from child support payments and property settlements and are not paid after the recipient's death.

Is alimony taxable?

For divorces finalized on or before Dec. 31, 2018, alimony payments were tax deductible for the payer spouse and were considered taxable income for the recipient. However, that changed on Jan. 1, 2019, after which alimony payment was no longer a tax deduction for the paying spouse and was no longer considered taxable income for the payee spouse.

These rules about taxable income, which were implemented as part of the Tax Cuts and Jobs Act of 2017, also apply to any divorce decree or separation agreement modified after Jan. 1, 2019, if the modification expressly states that the new tax treatment applies.

State tax laws may vary, so it's advisable to check the specific rules in your state. Additionally, for international situations involving U.S. citizens or residents paying alimony to non-residents, tax treaties may affect the tax treatment. Consulting with an alimony attorney or tax professional can clarify complex issues, such as what is tax deductible under a divorce or separation agreement.

Types of alimony

Temporary: Temporary alimony is paid during the divorce proceedings and ends when the divorce is finalized. It maintains the financial status quo and helps the lower-earning spouse cover living expenses, such as medical expenses and legal costs, during the divorce process.

Rehabilitative: This type of alimony payment helps the lower-earning spouse become financially self-sufficient. It is temporary financial support for the recipient while they gain education, job training, or work experience to improve their earning capacity.

Lump-sum: Lump-sum alimony is a one-time payment made to settle all spousal support obligations. The supporting spouse must pay the entire amount to the lower earning spouse upfront to make a clean financial break between each person.

Permanent: This is court-ordered for an unspecified duration, sometimes lasting until the death of either spouse or the remarriage of the recipient. It is a financial obligation in long-term marriages where one spouse has been financially dependent on the other and is unlikely to become self-supporting due to age, health issues, or lack of job skills.

What is child support?

Child support covers the costs of raising children. Its purpose is to ensure the basic needs of the child are met, including food, shelter, clothing, education, and medical care. Child support payments are typically made by the non-custodial parent to the custodial parent, and the courts will usually decide how much child support is to be paid.

Child support is neither taxable nor tax-deductible. It usually continues until the child reaches adult age or completes their education, depending on state laws.

Alimony vs. child support: Key differences

Alimony and child support serve distinct purposes as part of a divorce settlement.

The beneficiaries

Alimony is spousal support and provides financial assistance to one spouse from the other. It aims to help the recipient maintain a similar standard of living to the one they had during the marriage.

On the other hand, child support is considered financial support for children. Child support payments are typically made by the non-custodial parent to the custodial parent to ensure the child's basic needs are met.

The role of prenuptial agreements

Another key difference between alimony and child support is how each financial obligation is treated in prenuptial agreements. Prenuptial agreements can address spousal support payments but typically cannot include provisions about child support payments. Couples can specify whether one person will pay alimony, how much, for how long, or even waive it entirely. However, courts may still review these provisions for fairness at the time of divorce.

Child support, on the other hand, is generally not included in prenuptial agreements because it's considered the right of the child, not the parents. Any attempt to waive or limit child support for the parent who has primary custody in a prenup would likely be deemed unenforceable by the court. This is because the court always prioritizes the best interests of the child when making decisions about child support.

How they're calculated

The calculation methods for alimony and child support differ significantly.

The court considers various elements when determining how much alimony should be paid and for how long one spouse will pay alimony to the other spouse. These include the length of the marriage and the financial situation of both spouses.

The alimony payments to the lower earning spouse can vary based on several factors, but the following factors are common:

• Financial requirements of both partners
• Each spouse's capacity for self-support
• Additional economic resources available to each spouse, such as individual assets, property settlement during the divorce, and outstanding debts
• Limitations on the custodial parent's ability to work
• Any documented instances of domestic abuse
• Contributions made by each spouse during the marriage
• Any impact of alimony payments on tax obligations for both parties
• The duration of alimony payments will often depend on the marriage length

The state decides how much child support one parent will pay, usually relying on a formula for the payment amount that takes into account factors such as the income of both parents, the number of children, and the amount of time each parent spends with the children.

States vary in the formulae they use to calculate child support, but calculations involving how much to pay usually involve the following factors:

• The child's financial needs, such as educational expenses, childcare, and insurance
• The child's pre-divorce standard of living
• The paying parent's income
• The custodial parent's income and needs
• The number of children involved

5 ways a family lawyer can help

Whether it's an alimony attorney or a family lawyer who specializes in child support, a legal professional can guide you through the process to determine the best outcomes for your situation. Here's how they can assist:

Legal expertise: A family law attorney provides valuable expertise regarding your legal obligation in your state. They can explain eligibility requirements, payment duration, factors to consider when determining support amounts, and your responsibilities under state law.

Financial assessment: Family lawyers present financial information needed to determine appropriate support payments. They analyze income sources, evaluate expenses, and assess the financial needs of both parties, ensuring all relevant financial data is fully disclosed and accurately represented.

Negotiation and mediation: Lawyers help in negotiations between one spouse and the other, aiming for fair and reasonable settlements without court intervention. They represent clients in mediation sessions, working towards amicable resolutions while navigating complex emotional and financial issues with the paying spouse and receiving spouse.

Court representation: If negotiations fail, a family lawyer will advocate for their client in court. They present compelling evidence and arguments, ensuring the court considers all relevant factors in its decision. Their courtroom expertise is vital in protecting their client's financial interests and rights throughout the legal process.

Post-settlement support: Family lawyers continue to assist clients after initial agreements are reached. They help seek modifications to support arrangements due to significant life changes, enforce support orders if the paying party fails to comply, and navigate the legal process for any necessary adjustments to support agreements.

FAQs

Can you receive both alimony and child support?

Yes, it's possible for a parent to pay alimony and child support to an ex-spouse simultaneously. They serve different purposes. Child support is typically awarded first, then courts consider alimony if appropriate. Consult a family law attorney for personalized advice.

Can child support clauses be added to a prenup?

Prenups can include child-related provisions, but courts won't enforce clauses determining child support amounts or waiving obligations. Child support is considered the child's right, prioritizing their best interests over parental agreements. It is ultimately determined by state guidelines and circumstances at separation.

What happens if the paying party fails to pay spousal support or child support?

Failing to pay spousal support or child support to an ex-spouse can lead to serious consequences. For child support, enforcement is more rigorous. Penalties may include wage garnishment, tax refund seizure, license suspension, and jail time. Enforcement for the alimony awarded is similar but less automated. Missed payments accrue interest and can result in property liens or credit damage. Courts have various tools to compel payment. Paying parties should communicate with courts if experiencing financial difficulties.

Can alimony and child support be negotiated outside of court?

Each spouse can negotiate alimony and child support outside court through mediation or collaborative law processes. Alimony negotiations are flexible, while child support must adhere to state guidelines. Courts approve these agreements. Out-of-court negotiations can be beneficial, but complex cases may still require court intervention for equitable outcomes.