The Internal Revenue Code describes requirements for alimony, or spousal support, which is compensation given to one ex-spouse by the other ex-spouse.
Alimony provides the spouse who doesn’t make as much money with the money for living expenses over and above what is also provided by the higher income spouse in the amount of child support, if child support is provided.
However, child support and alimony are different.
A judge determines alimony after considering how much the recipient spouse is able to earn, both now and in the future, his or her health and age, how long the marriage lasted, what property is involved, and the conduct of the parties.
The judge may not award alimony, and usually only awards it when one spouse has been economically dependent on the other spouse for most of the marriage.
Alimony may give the person who pays it some tax advantages because it is tax-deductible to the payor, and taxable income to the recipient. Child support, by contrast, is neither tax-deductible to the payor nor taxable to the recipient.
The IRS Code stipulates that:
- Payments must be in cash, and are acceptable in a check or money order, but can’t be in the form of debt, services or property.
- The terms of the payments must in a written agreement or within divorce papers. It must be formal.
- If spouses file a joint tax return in the last year of the marriage, the paying spouse cannot claim alimony as a tax deduction for that year.
- The ex-spouses cannot live together and call any support alimony, nor can they live in separate quarters in the same house.
- The payor must stop the payments and stop claiming the tax deduction if the recipient dies.