Alimony is common in divorces when there is a disparity in income between the spouses. It is designed to bridge the income gap for the spouse who relied on his or her partner’s earnings. Here’s a quick primer on why alimony is awarded, trends in alimony awards, and tax implications, as explained in a recent article in AS.
Each state has its own rules on alimony, also known as spousal maintenance. However, judges have considerable discretion, so it’s hard to say which state has the most favorable rules to maximize the amount or time frame. Judges generally calculate alimony by looking at the length of marriage, the age and health of the divorcing couple, the ability to re-enter the workforce, and the ability of a spouse to pay. They may also take into account whether a spouse is also paying child support. If separation of assets leaves each spouse with sufficient income, there may be no need for alimony at all.
Permanent alimony is less common than it was years ago due to dual-income marriages. It may be awarded if a spouse is too old to re-enter the workforce or has a disability or health issue. Not all states allow permanent alimony.
Alimony may be modified in the future if circumstances change, and the divorce agreement does not state that it is nonmodifiable. A supporting spouse also may request that alimony payments stop upon retirement, depending on how an alimony award is worded.
Alimony used to be tax deductible for the paying spouse and taxable for the receiving spouse. That’s still the case for alimony awarded before January 1, 2019. However, alimony awarded after that date is no longer taxed or tax deductible, as a result of the Tax Cuts & Jobs Act of 2017.
Whether you are seeking alimony or defending an alimony claim, it is important to have an experienced Bucks County divorce attorney working on your behalf. Contact us at 215-340-2207 or email email@example.com.