Divorce can be a complex and emotionally charged process, bringing about various emotional, legal, and financial concerns, including alimony or spousal support. Who pays alimony in a divorce is important, as it can provide critical support during a challenging time. Divorcing couples need to understand spousal support and the tax implications of receiving it as the process continues.
What is Alimony Payment?
Alimony, or spousal support, is a financial arrangement ordered by the court or agreed upon by the divorcing parties where one spouse provides financial support to the other after a divorce. The primary purpose of alimony is to provide financial assistance to the lower-earning or non-earning spouse to help them maintain a standard of living similar to what they enjoyed during the marriage.
In Texas, there are two types of spousal support
- Temporary Spousal Support – This type of spousal support applies during the proceedings and ends once the divorce is final.
- Post-Divorce Maintenance – This type of alimony applies after the divorce is finalized and can be either temporary or, in rare cases, permanent. The duration and amount depend on factors such as the length of the marriage and the recipient’s needs.
Who Pays Alimony in a Texas Divorce?
Eligibility for Spousal Support in Texas
In Texas, awarding alimony occurs on a case-by-case basis. The court considers several factors to determine whether eligibility for spousal support, including:
Family Violence
Spouses who dealt with family or domestic violence during the marriage against them or their child could be eligible for spousal support.
Marriage Duration
Spouses seeking support who cannot financially meet their minimum reasonable needs can be eligible for spousal support if the marriage lasts at least 10 years.
Disability
Spouses with an incapacitating physical or mental disability that prevents them from earning sufficient income can become eligible for alimony.
Child Care
Spouses caring for a child from the marriage who requires substantial care and personal supervision due to a physical or mental disability can become eligible as their child’s need for continuous care prevents them from obtaining and maintaining employment.
If the court establishes eligibility, the court then uses several factors to determine the amount, duration, and type of spousal support, including:
- Financial Resources – This includes all possible income sources of the spouse seeking support, including community and separate property, and their ability to meet their needs independently.
- Education and Employment Skills – The court examines both spouses’ education and employment skills, the time necessary for the spouse seeking maintenance to acquire sufficient education or training to enable them to find appropriate employment, and the availability and feasibility of such education or training.
- Duration of the Marriage – The court considers the length of the marriage, and longer marriages are generally more likely to result in spousal support awards.
- Age, Employment History, and Physical and Emotional Condition – The age, employment history, earning ability, and physical and emotional condition of the spouse seeking maintenance.
- Contributions to the Marriage – The court evaluates all contributions by one spouse to the education, training, or increased earning power of the other spouse and homemaker contributions.
- Efforts to Seek Employment – The court looks at the efforts of the spouse seeking maintenance to pursue available employment opportunities or acquire additional education or training to become self-sufficient.
How Much Tax Do I Pay on Alimony Received?
The tax treatment of alimony has undergone significant changes in recent years. Before the Tax Cuts and Jobs Act (TCJA) of 2017, alimony payments were deductible by the paying spouse and considered taxable income for the recipient. The TCJA, which took effect on January 1, 2019, however, altered this arrangement, putting agreements into two categories:
- Pre-2019 Spousal Support Agreements – The old tax rules apply to divorce agreements finalized before January 1, 2019. Alimony payments are deductible for the payer and taxable for the recipient. Recipients must report the alimony received as income on their tax returns and pay taxes accordingly.
- Post-2019 Spousal Support Agreements – For divorce agreements finalized after January 1, 2019, alimony payments are no longer deductible for the paying spouse, nor are they considered taxable income for the recipient. This change means the alimony recipient does not have to pay federal income tax on the amounts received. Similarly, the paying spouse cannot deduct alimony payments on their federal tax return.
Contact a Texas Divorce Lawyer Today
Dealing with a divorce and questions about spousal support can feel overwhelming, but you don’t have to face it alone. Whether you’re seeking alimony or need assistance understanding your obligations, our experienced The Woodlands alimony attorneys at BB Law Group PLLC are here to help you achieve the best possible outcome. We can provide legal guidance tailored to your situation to support you during a challenging time. Call us today at (832) 534-2589 for your confidential consultation.
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