Alimony/Spousal Support and Taxes

On behalf of Jarrell, Hicks & Waldman, PC posted in Spousal Support on Wednesday, June 6, 2012.

Spotsylvania County Divorce and Military Divorce Lawyers

It is important to understand the financial implications of a divorce and their affect on your finances. Frequently, the most feared and sought after (depending on your position) financial aspect of a Divorce is alimony, or as it is known in a Virginia divorce, spousal support. What is spousal support, and how does it work?

Spousal Support (known in most other states as Alimony) is a legal obligation of one spouse to make a payment or payments to the other after a separation or divorce. Spousal Support is not an absolute right, but rather, an optional tool in a divorce for the Judge to achieve what he believes is an equitable result. If the parties cannot or do not agree on the ultimate resolution of the issue of Spousal Support, by written agreement, the court can make a decision about the terms and conditions of Spousal Support based upon the evidence presented by both sides.

Spousal Support is separate from child support, which is also a payment to received or made by one party to the other, but is subject to very different tax handling. Child support is specifically a payment from one spouse to the other for the care of children that resulted from that union.

The courts look at various factors when determining the value of Spousal Support payments, including:

  • The duration of the marriage
  • The educational level of each spouse
  • The age of the respective spouses at the time of divorce
  • The efforts financial and non-financial to benefit the family during the marriage
  • The relative incomes of the spouses, and the probable future earnings of the spouses
  • Whether anyone is at fault or is the cause for the divorce
  • The health of each spouse

Although there is a perception that it is much more likely for women to be granted spousal support than men, Virginia law is actually gender neutral and each year more and more wives are ordered to support their husband.

For tax purposes, spousal support is a reduction in the payor's gross income, and is an addition to the recipient's gross income. Generally taxing authorities look to criteria similar to the following top determine if the payments are considered spousal support (alimony) for tax purposes:

  • The payment is specifically as a result of a divorce or property settlement agreement
  • The payment must be a monetary payment and not a distribution of an item
  • The order or agreement does not say that payments are specifically "not alimony"
  • The payer and the recipient no longer share a household
  • The support payments end upon the death of the recipient

If you have any questions about Spousal Support in Virginia, or if you are considering a divorce in Fredericksburg or Spotsylvania, Virginia, contact the Divorce attorneys at Jarrell, Hicks & Waldman, P.C. at 540-582-5300 today.

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