“Spousal support,” also known as “alimony,” is a term used for payments from one spouse to another after a dissolution has been filed. Spousal support can be broken down into two types: temporary and permanent. Before you move forward with your divorce, it is a good idea to understand how spousal support is determined, how long the support may last, and how it may affect your taxes.
Factors Considered to Determine Spousal Support:
The amount and duration of spousal support paid in California is determined after carefully reviewing numerous factors. Cal. Fam. Law § 4320provides in part that the Court shall consider many factors in ordering spousal support, such as:
- The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
- The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.
- The extent to which the supported party’s present or future earning capacity is impaired by period of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.
- The extent to which the supported party contributed to the attainment of and education, training, a career position, or a license by the supporting party.
- The ability of the supporting party to pay spousal support, taking into account the supporting party’s earning capacity, earned and unearned income, assets, and standard of living.
- The needs of each party based on the standard of living established during the marriage.
- The obligations and assets, including the separate property, of each party.
- The duration of the marriage.
- The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
- The age and health of the parties…
Courts look at the totality of circumstances when determining the amount of support and whether a temporary or permanent support order should be granted. These factors vary from case to case and must be looked at as a whole.
Duration of Spousal Support:
To the payor spouse, a support order can seem dauting. A temporary support order, or “pendente lite” order, may consist of a single lump-sum payment or may be broken up into multiple payments to be paid over a period of time. Oftentimes, the parties themselves agree on terms and conditions that work for them that the Court considers when deciding how support payments are to be made.
The duration of spousal support is often tied to the length of the marriage. A short-term marriage is a marriage of less than 10 years. The general rule is that, in a short-term marriage, spousal support will last for half the length of the marriage. In longer marriages of 10 years or more, the ourt will not automatically set a definite duration at the onset. However, a permanent support order will be issued upon the issuance of a divorce decree. It should be noted that a permanent support order is not truly permanent. Circumstances change over the years and can affect a permanent support order. For instance, the receiving spouse may re-marry or cohabitate with another person, lessening his or her need for such support. On the other hand, the payor spouse’s employment situation may change, which would affect his or her ability to pay spousal support. A true permanent spousal support order is generally reserved for spouses who lack the ability to become self-supporting due to age or disability.
Modification or Termination of Spousal Support:
Either spouse can request a modification or termination of periodic payments due to a material change in circumstances. Absent a written agreement stating otherwise, spousal support terminates on the death of either spouse, or on the remarriage of the recipient. If the supported spouse has begun cohabitating with another party, there is a rebuttable presumption that the need for spousal support has decreased. (Cal. Fam. Code § 4323.) A request to change a current order must be made through the Court and cannot be made unilaterally.
Is Spousal Support Tax Deductible?
After 2018, the federal and California tax treatment of spousal support (i.e. alimony) is the same: the paying spouse of the support does not receive a tax deduction for paying alimony and the receiving spouse does not report in income the alimony payment received. Divorce agreements entered into before 2019 receive different tax treatment. Under pre-2019 agreements, the payment spouse receives a tax deduction for paying alimony and the receiving spouse reports alimony in income for taxes. For modifications to such pre-2019 agreements after 2018, the spouses have to agree to change the tax treatment to opt in to the post 2018 tax treatment. If the do not do so, then the tax treatment for pre-2019 agreements applies.
If you have any questions or concerns regarding the spousal support, including the tax implications of spousal support, our team of professionals is happy to provide you with the guidance you need.
