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Spousal Support Tax Issues

Divorce is a time of transition and change. Spouses move out of the marital residence, custodial schedules change, property is divided and spousal support orders are implemented by agreement or by Court order. Spousal support, as defined by the Internal Revenue Code, has tax implications for both the payor and the recipient.

When a person files for divorce, either spouse can request spousal support. Spousal support is a “legal obligation on a person to provide financial support to their spouse after marital separation or divorce” (Wikipedia). There are many factors that go into the determination of spousal support. Some of these factors include: length of marriage, length of separation, age of the parties at time of the divorce, relative income of the parties, future financial prospects of the parties, health of the parties, fault in marital breakdown, debts and property, education, domestic violence history, and tax impact of spousal support (http://www.leginfo.ca.gov).

There are 2 basic types of support: Temporary and Permanent. Temporary spousal support is awarded prior to entry of the final judgment. The purpose of temporary support is to maintain the “status quo” of the parties until the judgment. The purpose of the permanent support is to provide financial assistance to one spouse once the community property estate has been divided. A general rule is that spousal support will last for half the length of a marriage, if the marriage was less than ten years in duration. In marriages of more than ten years in duration the Court has increased discretion with regards to the term of the spousal support obligation.