April 5, 2023
In addition to hiring a divorce lawyer, a divorce usually involves regaining your financial independence and unraveling the mutual financial network you built with your spouse. Divorce also serves as a time to rein in shared debts so that you can pay them off accordingly.
With all these financial questions, you and your spouse are likely wondering about alimony or child support. If you’re in a position to receive support or pay it, you should educate yourself on the differences between alimony, spousal support, and child support.
This article explains the differences between each of them and why those differences matter. If you have questions after reading, consult a qualified divorce lawyer.
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Differences
The differences between alimony, spousal support, and child support lie in how the judge orders the payments made and their intended use.
Alimony is the result of a contractual agreement between you and your spouse. Spousal support, or spousal maintenance, is a court-ordered payment structure, as is child support. However, alimony and spousal support should meet the needs of your former spouse, whereas child support should meet the needs of your child or children.
Today, alimony is considered to be a dated term and is often used interchangeably with spousal support. However, alimony can be decided through a contractual agreement, while spousal support is ordered by a judge.
Beneficiaries
Alimony is a contractually obligated payment from one spouse to the other spouse after a divorce. Spousal support is ordered by the judge for a specific period following the divorce. For example, the judge might decide to structure spousal support so that it’s no longer required if your spouse remarries.
The purpose of alimony and spousal support is to help whoever is receiving it maintain a lifestyle similar to the one they had before the divorce. However, it is neither automatic nor guaranteed. The person who needs it must request it, and the judge must evaluate the details before making a decision.
Child support payments are intended to meet the basic needs of your child or children.
Child support will go toward:
- Food
- Shelter
- Clothes
- Medical expenses
- Extraneous costs
The amount of child support a judge can order will change depending on the number of children and the income of both parents.
Taxes
Alimony, spousal support, and child support differ in terms of how they are taxed. Spousal support falls under the same provisions as alimony, but child support is slightly different. Here’s a brief explanation of the differences.
Alimony and Spousal Support
Alimony and spousal support are treated differently depending on whether you are paying or receiving the money. The two can also differ depending on when your divorce was finalized.
You may deduct from your taxes alimony and spousal support payments for divorces finalized before December 31, 2018. If your divorce finalized after that, the IRS will tax any alimony payments you receive.
The Tax Cuts and Jobs Act eliminates the deduction for alimony payments as well as taxable income for divorces.
Child Support
Child support is intended to benefit the child. So child support payments are not considered deductible income and cannot be written off by the person who pays them.
The IRS
Alimony, spousal support, and child support payments fall under the purview of the Internal Revenue Service (IRS). Alimony and spousal support adhere to specific rules regarding how to deduct payments and report income.
In the case of child support, the IRS has rules regarding who is considered to be the custodial parent and how they can claim their child as a dependent.
Alimony and Spousal Support 101
The IRS considers spousal support payments considered alimony if:
- Payments cease when the spouse receiving them dies
- The spouse receiving payments cannot file a joint tax return
- Payments can only be made by cash, check, or money order
- Payments should be made per a divorce or separation agreement
- Payments are not qualified as a property settlement or child support
- Spouses must live in separate households while payments are ongoing
- The divorce or separation agreement must qualify the payments as alimony
If you qualify, to deduct alimony payments, fill out Form 1040, Schedule 1. You will need to communicate with your former spouse to obtain required information to complete the form.
Child Support 101
Child support differs from spousal support and alimony because it is not subject to reporting requirements. These stipulations apply whether you are making child support payments or receiving them. However, both parents should be cautious if they plan to claim the child or children as dependents on their taxes.
In most cases, the parent who houses and feeds the child most of the year is considered to be the custodial parent. If all the rules for claiming a dependent are satisfied, the custodial parent is usually the one who is eligible to claim the child as a dependent.
With this in mind, the non-custodial parent can still claim the child as a dependent, provided this claim is specified in the divorce decree. However, keeping everything legal requires the custodial parent to sign Form 8332, which releases their right to claim the child as a dependent.
Consult a Divorce Lawyer Today
Alimony, spousal support, and child support can get complicated quickly. If you are in a situation where you need to figure out how to make or receive payments, consult with a good family lawyer in St. Petersburg today.
A divorce lawyer will have a working knowledge of all the forms and conditions described above and will be able to answer your questions and build an effective strategy so that you and your spouse can reach an agreement that works well for both of you.