Spousal support is a term used to describe payments that are made from one spouse to another during a separation or divorce.
About Spousal Support
When a married couple separates or gets a divorce, the court may award spousal support to one of the spouses. Also known as alimony, this form of support is meant to offset the unfair financial consequences that divorce and separation can cause.
Unlike child support, spousal support is not mandated in most states and may not be awarded in every case. Instead, it is usually left to the court's discretion. The spouse who is the higher earner will almost never be awarded spousal support. The spouse who earns no wages or a lower wage might receive support payments, depending on factors such as:
- The length of the marriage
- The standard of living during the marriage
- The financial situation of both spouses
- The age and physical/emotional condition of both spouses
Spousal support is considered a rehabilitative form of support, meaning that it is often only temporary. The court usually sets a termination date in which the support will end. This date is based on the amount of time the court estimates it will take for the recipient spouse to become self-supporting. Most support will also be terminated if the recipient spouse gets remarried.
In some cases, spouses can receive alimony payments for life. Rewards may even continue after the paying spouse's death. These indefinite payments are very dependent upon the recipient spouse's age, physical condition, and ability to earn wages, as well as the length of the marriage.
Spousal Support and Taxes
The IRS has very specific rules in regards to spousal support and taxes. Support that is received in payment intervals over a period of time is considered income for the person who receives it and a deduction for the person who pays it.
Recipient spouses must declare all payments as part of their income and will be taxed on the payments. Because the paying spouse receives a significant tax deduction, the court will usually take this into consideration when determining the reward amount.
There is generally only one exception to this support tax rule and it involves lump sum payments. If support was paid in one lump sum, a deduction does not normally apply. To learn more, contact your accountant or visit the IRS online.
When Your Spouse Won't Pay
When child support payments aren't made, the payee must suffer the threat of garnished wages, property liens, and even jail time. Unfortunately, these enforcement procedures do not apply to spousal support. If your spouse isn't paying, your only course of action will be to contact your lawyer and return to court in a contempt proceeding. The court will then force payment and do its best to get you the support you were originally awarded.
When You Have to Pay
Even though divorce can cause bitter feelings, withholding money from your spouse is wrong. If you are ordered to pay spousal support, it will be in your best interests to heed the judgment. When you don't pay, legal action can be taken against you. This can make divorce proceedings even more unpleasant and drag things out even longer.
You should also keep in mind that making alimony payments may actually be beneficial to you. If you are a high income earner, every tax deduction counts. Being able to deduct alimony payments from your income can supply you with significant tax benefits that may have not existed otherwise. For this reason alone, many couples have arranged alimony payments.