Alimony and child support are often confused with each other. This mix-up is understandable because they are both types of financial support that can be awarded when couples divorce or have custody cases in the family courts. This blog will talk about alimony and child support and how they are different from each other.
When you add up the amount of alimony and child support that a person might receive or have to pay over the years, you will see how much money is at stake. It can be a good decision to talk with North Carolina family law attorneys about your case.
Are Alimony and Child Support Taxable or Deductible?
Alimony, also called spousal maintenance, used to be taxable as income to the person receiving the payments. The payments were deductible to the person making the payments. That arrangement changed in 2019. Spousal support payments made after 2018 are no longer considered income by the Internal Revenue Service (IRS) to the recipient or allowed as deductions to the paying party.
Child support has not been treated as income to the party receiving the payments or a deduction to the party who pays the child support. Child support was always treated this way by the IRS. Now, the IRS treats child support and alimony payments the same.
Purpose of Child Support and Alimony in North Carolina
Judges issue child support orders to make sure that, to the extent possible, the needs of the child will be met after the parent’s divorce. The reasoning behind child support orders is that a child should not get thrust into poverty because of the breakup of the parent’s marriage. When one parent makes more money than the other parents, the courts often issue child support orders.
Court-ordered spousal support, on the other hand, is based on the financial needs of one spouse and the other spouse’s ability to pay alimony. The judge will consider the gross and net incomes of both parties, as well as the length of the marriage, the age and health of both spouses and how much each spouse contributed to the marital property the couple acquired.
Judges also look at the earning potential of each spouse. For example, if one spouse has a highly marketable graduate degree but chooses to work a part-time minimum wage job, the judge might impute income to that spouse based on their potential, rather than their actual income. Also, one spouse might have limited earning potential because of a disability or because they are raising very young children.
The Types of Child Support and Alimony
There is only one category of child support in North Carolina, but there are several types of spousal support in our state.
- Post-separation alimony is temporary. This spousal support helps one spouse pay their living expenses during the pendency of the divorce case.
- Rehabilitative spousal support can be awarded to help one spouse complete their education, get job training, or take other measures to re-enter the workforce or improve their career prospects after the divorce.
- Durational spousal support and permanent alimony are two types of maintenance that tend to have a longer term of payments after the divorce. The judge will consider the health and income potential of both spouses as well as the length of the marriage and other factors when determining these types of spousal support.
North Carolina family law attorneys can provide guidance to you during your case that involves child support or alimony. Contact them today for a consultation.