The financial implications of getting a divorce are often the most complicated part of the separation process. You’ve got to untangle your finances, resolve homeownership issues and settle any unpaid debts accrued during your marriage. If you have kids, you’ll also need to consider whether you or your spouse is entitled to alimony or child support.
Although the two terms are often used interchangeably, it’s important not to get them confused. Keep reading to find out the difference between child support and alimony.
What is Alimony?
Alimony, or spousal support, is an amount paid from one spouse to another following a divorce. Usually, the payment is awarded by a judge as part of a separation or divorce agreement. The payments themselves can be ordered for a set time, indefinitely, or until the spouse receiving the payments remarries, depending on your circumstances.
Broadly speaking, alimony aims to support the spouse on the lowest income or no income at all, as is the case with stay-at-home moms and dads. The repayment amount will take into account the financial health of both parties to ensure neither party’s quality of life suffers as a result of the separation. The judge will also consider whether the spouse on the lowest income made sacrifices, such as giving up a career to raise your children, and how that affects their place in the job market should they re-enter it.
Other factors taken into account when establishing an alimony settlement include:
- Each spouse’s income and employment situation
- Their living expenses
- How assets were divided in the divorce
- The length of the marriage
- Each spouse’s age
It’s worth noting that alimony is not automatically included in a divorce settlement, so you should never leave it up to chance. The spouse requiring the alimony needs to request it through the family court.
What’s the Difference Between Child Support and Alimony?
Whilst alimony provides financial support to the spouse; child support is paid by one parent to the other to provide financial assistance to a child or children. Usually, child support is paid to the parent with custody of the children or to the person with whom the children reside.
The amount of child support that’s paid, depends on the financial situation of both spouses, where you live, and how you share childcare responsibilities. In general, child support is designed to maintain a child’s standard of living and cover their basic needs. are covered. The money can be used to pay for necessities like:
- Housing costs, including the rent or mortgage repayments on the child’s home and proper maintenance to ensure their living environment is safe
- Food, clothing, toys, books, and furnishings for the child
- Medical bills and insurance, including dental care and glasses if needed
- School expenses, including books, supplies, clothing, and fee’s if applicable
- Extracurricular activities such as sports and summer camps
Child support laws vary by state. So if you have a child support agreement issued in Illinois and one spouse relocates to California, things can become more complicated. Always speak to a lawyer if you suspect that you or your ex’s circumstances will change soon.
Child Support VS Alimony: What Type of Support is Best for Me?
When you’re comparing child support to alimony, it’s important to remember why you require financial support in the first place. If you’re concerned about the costs of providing for your children, you need to request child support. If you’re concerned that your standard of living will decline after your divorce you should discuss your alimony options with a dedicated alimony attorney.
One of the major differences between alimony and child support is that alimony repayments can be taxed. If you are the beneficiary of the payments, you’ll need to claim them as taxable income on your tax return. Conversely, if you’re the payee, you can deduct the payments from your return and qualify for a tax break.
Child support, on the other hand, isn’t taxable because it’s intended to benefit children, not the parent that receives the payment. It’s also non-deductible for the parent who makes the payments.
Do I Qualify for Alimony?
Qualifying for child support is simple. You need to have children!
Qualifying for alimony repayments is a little more complex. The IRS has specific requirements that must be met to receive spousal support payments.
To qualify, ex-spouses need to meet the following criteria:
- They cannot file a joint tax return.
- Payments must be in cash, by check, or by money order
- Payments must be explicitly outlined in a divorce or separation agreement
- The payments cannot be categorized as something other than alimony
- Spouses do not live in the same residence when receiving or sending payments
- There’s no liability to continue the payments if the receiving spouse dies
- Payments are not treated as child support or as settlement for property
If you start paying or receiving alimony and your eligibility against the above criteria changes, you need to discuss your circumstances with your lawyer. For example, if you and your ex get back together following your separation and start to share a home again, your entitlement will change.
The Bottom Line? Always Talk to an Attorney First
Whether you’re at loggerheads during your divorce or managing the proceedings peacefully, one thing is always true; the wellbeing of your kids comes first. Navigating your finances following a separation is complicated, so speak to an experienced attorney who can guide you through the process. They’ll be able to advise on your circumstances and get the best settlement for you and your children.
If this post has helped you understand the difference between child support and alimony, check out the rest of our site for more legal tips and advice.