Although alimony and child support may seem related and thus confound some people, they are not the same. They are among the key considerations that persons contemplating divorce should think about carefully.
Whether it’s paying off common obligations or deciding who will own the marital property, financial issues before and after a divorce may suddenly become complicated. Alimony and/or child support, (and whether or not a spouse is entitled to receive such support) are two of the most common financial concerns that surface.
The two terms may come into play throughout the process for anyone considering filing for divorce. Read the meanings, comparisons, and samples for a better grasp of what each of us means.
What is Alimony?
Alimony, commonly known as “spousal support,” is a financial legal obligation provided by one spouse to the other after a divorce (typically on a monthly basis).
A judge can mandate alimony payments for a set amount of time or until the support recipient remarries. The spouses can settle on alimony terms with the help of a mediator or independently.
Alimony is typically meant to assist the receiving spouse in maintaining a lifestyle similar to that which they had throughout the marriage. It is not automatically awarded; the spouse who requires alimony must request it.
How Much is Alimony?
Alimony is often between 30 and 40% of the paying party’s income. This figure varies depending on the state and the circumstances. The court also considers how much the other party earns or could earn, as well as how much they require to sustain their lifestyle.
The amount to be paid as alimony is determined after considering many factors, especially the duration of the marriage.
What Determines Alimony Payment?
The needs of the dependent spouse set the tone when alimony is requested, yet there are plenty of other factors that combine to determine alimony payment. The court analyzes the requesting spouse’s cost of living to his or her income, if any, to assess financial necessities.
If the deficit of the requesting spouse’s income is insufficient to meet his or her daily living expenditures, then that shortfall becomes the “need” and the judge will order the amount of alimony to be paid. You can check out other factors that determine the amount of spousal support.
Taxation and IRS Rules Concerning Alimony?
The regulation for tax reasons varies depending on whether you pay or receive alimony. If your divorce was completed before December 31, 2018, alimony payments to your spouse are normally tax-deductible under the Tax Cuts and Jobs Act.
If your divorce was finalized after December 31, 2018, and you’re paying alimony, the payments aren’t usually tax-deductible. The alimony recipient is not required to report the alimony as earnings.
Additionally, the IRS has established numerous standards that must be met in order for payments to be declared alimony and deductible for people who divorced before December 31, 2018.
What is Child Support?
Child support (sometimes known as child maintenance) is a recurring payment following the dissolution of a marriage or other comparable relationship, a non-custodial parent pays a custodial parent (or parent, caregiver, guardian, or state) child support (or child maintenance).
An obligor pays child support to an obligee explicitly or implicitly for the care and support of children from a union that has ended, or in certain situations never existed. The obligor is typically a non-custodial parent. The obligee can be a custodial parent, a caregiver, a guardian, or the state.
The process begins when you apply for child support services or when your local child support office receives a referral from another government agency,
How Much is child support?
To determine the basic child maintenance, we must first determine the gross income of each parent. In most jurisdictions, the law demands the accumulation and removal of numerous sources of revenue.
To arrive at an approximate figure, take the parent’s gross income from their most recent income tax return, or the number in Box 5 of their most current W-2 forms, then deduct the amount of FICA (Medicaid and Social Security tax) paid by the parent.
What Determines Child Support Payment?
The amount of money the parents earn is the most important component in calculating child support. Some states evaluate both spouses’ income, while others solely consider the non-custodial parent’s income. Another crucial aspect in most jurisdictions is the percentage of time each parent spends with their children.
In some states, child support is calculated as follows: one child equals 20% of net monthly income, two children equal 25% of net monthly income, three children equals 30% of net monthly income, four children equals 35% of net monthly income, and five children equals 40% of net monthly income.
Taxation and IRS Rules Concerning Child Support
There are no reporting requirements for paying or receiving child support payments because it is neither tax-deductible nor taxable income. However, when declaring their children as dependents on their taxes, parents must use caution.
For tax reasons, the parent with whom the child spends the most of the year is the custodial parent. If the procedures for claiming dependents are fulfilled, this parent can claim the child as one.
However, if a separation agreement or divorce ruling allows it, the non-custodial parent might claim the child as a dependent. In that instance, the custodial parent must sign Form 8332, relinquishing their rights to declare the child as a dependent.
The major distinction between alimony and child support is the objective of each payment. While alimony is paid by the higher-earning spouse to the lower-earning spouse to maintain living standards, child support is given to support any children’s basic necessities, like food, clothing, housing, and medical care.
Here we present a detailed breakdown of the differences between alimony and child support as it regards the major issues of family law.
Alimony Vs. Child Support – Purpose of payment
As previously stated, alimony is intended to assist a non-earning ex-spouse, whereas child support is intended to assist any children born out of a broken marriage.
Alimony Vs. Child Support – Requirements and Conditions
To be considered alimony, the recipient spouse must prove they cannot support their standard of living and the payments must be owed by a divorce or separation agreement.
Additionally, the payments should not be classified as non-alimony, there should be no need to continue payments if the receiver dies, and the spouses really shouldn’t live in the same house when the payments are made.
To be considered child support, there needs to be a child or children that were born before the dissolution of the union, for whose upkeep the payment is intended to support,
Alimony Vs. Child Support – Who Pays to who?
In the case of alimony, it is the higher-earning spouse that pays maintenance support to the lower-earning spouse, while for child support, it is the non-custodial parent that pays to the parent with child custody (or caregiver, guardian, or state)
Alimony Vs. Child Support – Tax Deduction
While child support is intended for the child’s benefit, it is not subjected to any laws of taxation because it’s not considered an income, alimony used to be taxed because it was seen as a type of income prior to January 1, 2019. It has since been changed though due to the Tax Cuts and Jobs Act, hence it’s also not taxable now.
Alimony Vs. Child Support – Penalties of Not Paying
In most US states, as well as other countries, failing to pay child support is a crime. As a result, if payment is ignored or is late, major consequences or repercussions may occur.
Paying alimony late is really not a crime, but blatant nonpayment can be considered a violation of a court order and punished in a variety of ways, including imprisonment.
Alimony Vs. Child Support – What determines the Payments?
When it comes to alimony, the court decides based on the standard of living the couple had before their divorce. Child support, on the other hand, is determined by a number of factors including the income of the noncustodial parent. However, the court makes its decision considering the child’s best interest.
Does Alimony Affect Child Support?
Because child support is a legal responsibility owed to your children, the court will always prioritize the interests of the children over those of the separating spouses. In the eyes of the law and the court, the spouses are less significant. If you only have enough money to pay for one kind of maintenance, it will be for the children.
Child support requirements will never be reduced to allow for spousal support payments. It’s worth noting that if you pay alimony for a different spouse, such as a previous marriage, it might factor into your child support because it reduces your income, but the court will decide such on a case-by-case basis.
Alimony and child support are two different things altogether, even though they are some sort of maintenance support. The major difference between alimony and child support is the fact that alimony is support paid to an ex-spouse for upkeep, while child support is support paid for the upkeep of children born in a union by the non-custodial parent.
Be sure not to confuse this topic with the difference between alimony and spousal support.