During and after a divorce, there are often new financial obligations for one or both partners. This is particularly true when there are children involved. During a marriage, both spouses may combine their income; in some cases, only one spouse works while the other stays home to take care of the home and children. In other cases, one spouse might make significantly more money than the other. Of course, sometimes both spouses make similar amounts of money. Depending on the circumstances, a judge might award one spouse alimony, child support, or both. Keep reading to find out the differences between these two different types of financial obligations.
When Might Someone Be Awarded Alimony?
Alimony is sometimes called spousal maintenance. It is awarded when the spouse making a lower income (or no income) requires funds from the spouse, making the higher income maintain the same or similar lifestyle they had when married. Of course, not every divorcing couple has the financial means to ensure that both spouses maintain that lifestyle, so many factors go onto it. First, the income of each partner is looked at.
Will the spouse earning a lower income be able to return to work or switch from part-time to full-time hours to boost their earning power? That is a consideration, and, in that case, alimony might be awarded only for a short period of time with the expectation that they will return to work. The age, health, and financial obligations of both parties are also considered. If the lower-earning spouse remarries, another factor can go into a judge deciding to modify the plan and reduce or eliminate the alimony payments.
When Might Someone Be Awarded Child Support?
Child support is money that one parent pays the other to ensure that their shared child has the same (or similar) lifestyle they enjoyed while the parents were married. In general, if one parent makes substantially more money than the other, then that parent will pay the other one child support. If both parents make roughly the same amount of money, there might not be any child support paid by either party.
Other financial obligations and the ability to work are factored into the equation. Further, each state has its own rules about how child support is determined. So a judge will need to look at the custodial situation, which parent makes more money, who is paying for things like health insurance and private school tuition (if they are not shared), and other factors, then they will compare that to the state laws to determine the correct amount of child support owed by one parent if any.
What Does Child Support Have to Do with Child Custody or Visitation?
Decades ago, most children lived with their mothers after a divorce. Fathers would see the children for visitation and would pay child support to the mothers. Since the mothers tended to have custody in most cases, it was a given that the fathers would be supplementing the mother’s income to provide for the child. Since joint custody is more common now, it is also more common that neither parent will pay child support.
If you both make similar incomes, then each parent will generally be responsible for sheltering, clothing, and feeding their child when they have them. Larger expenses, such as orthodontic braces or summer camp tuition, might be shared. In cases where child support is paid, it will depend on which parent makes more money. Today, the wife might make more money than the husband; in some cases, the husband stays home with the child while the wife is the breadwinner. Since the attitudes toward child custody have changed over the years, so have the attitudes toward child support.
What Are the Tax Implications of Alimony vs. Child Support?
It is important to talk to a qualified tax specialist when filing taxes if you either pay or receive alimony or child support. An accountant, tax attorney, or tax preparer will be the one to help you determine whether you owe taxes, can deduct alimony payments or can claim your child on your tax return. With, alimony can be taxable income (and a deductible expense) in most cases, and child support cannot.
Since the funds paid toward child support go to the child’s care, it is not considered taxable income or a tax deduction. And since alimony is used as the lower-earning ex-spouse’s income, it is considered taxable income (and a deduction), but only for divorces finalized in or before 2018. Your divorce papers should state who can claim the child on their taxes; this might alternate from year to year, one parent might always claim the child, or one parent might claim one child while the other parent claims another. Talk to your tax specialist to avoid making a potentially expensive error.
What If the Person Paying Loses His or Her Job?
Alimony and child support payments are determined at the time that the divorce is finalized. You might also have these payments before the divorce is final, depending on what you and your ex decide as well as what a judge thinks are necessary. However, since circumstances can change as the months and years pass, these are not necessarily permanent arrangements. Both alimony and child support can be modified if one parent makes more money or loses their job.
For example, if you are paying child support and your child’s other parent gets a promotion and a large income boost, it is possible that you do not need to pay as much child support. Similarly, if you were to lose your job or have your hours cut, you might be able to pay less. You can talk to your legal advocate about how to get your child support or alimony payment modified through the court system.
National Family Solutions can help you navigate these issues. Contact us today to find out how we can help you get the child support or alimony you deserve or to learn more about modifying your agreement.