For about a generation, alimony payments have been tax-deductible and alimony receipts have been tax reportable. That all changed on January 1.
The 2017 Tax Cut and Jobs Act eliminated the alimony payments tax deduction. The TCJA also ended the reporting requirement.
No one is really sure what effect the change will have. TCJA backers say the new rules will benefit divorced women because it reduces their taxable income. Others, however, say the change will hurt divorced women. An ex-husband might claim that, since the tax deduction is going away, he can no longer afford to pay alimony.
Duration of Alimony Payments in McLeod County
Under Minnesota law, a divorce cannot be an unfair financial burden for either party. Statistically, divorced men rebuild wealth more quickly than divorced women. Add two and two together, and you get four. Because of these facts, most husbands pay spousal support to most wives.
In the Gopher State, judges have a great deal of discretion when setting the duration of payments. Typically, alimony comes in three forms:
- Temporary Alimony: When a couple divorces, a number of immediate short-term financial needs pop up. Attorneys’ fees to a Hutchinson family law attorney and ordinary household expenses spring immediately to mind. If the obligee spouse (usually the wife) needs help with these expenses and the obligor spouse (usually the husband) has the ability to pay, a judge will probably award temporary alimony. This type of alimony automatically terminates when the divorce becomes final.
- Short Term Spousal Maintenance: Once the divorce is final, many obligee spouses need some time to become economically self-sufficient. This journey may involve going back to school to finish a degree or accepting a low-paying internship to merge back into the workforce. If the economic need continues, and the ability to pay continues as well, the judge may extend maintenance payments for a year or two, based on the evidence.
- Long Term Alimony: If the couple was married for a long time (usually over ten years) or the obligee spouse will never become economically self-sufficient due to a disability, the judge may order permanent or long term alimony. Sometimes, these payments last forever. Other times, the payments end after a period of years (perhaps twice the duration of the marriage).
A judge may order one or more forms of alimony. Typically, these awards can be modified, as outlined below.
Spousal Support Amount
As mentioned, when considering alimony payments, a Hutchinson family law attorney must take into account the obligee’s economic need and the obligor’s ability to pay. To assist in this process, Minnesota law sets out a number of factors to consider, including:
- Financial resources of each spouse,
- Standard of living during the marriage,
- Amount of time the obligee needs to become self-sufficient,
- Length of the marriage,
- Custody of minor children (i.e. does the residential custodian need help with the house payment),
- Economic and noneconomic contributions to the marriage,
- Tax consequences,
- Agreements between the parties, and
- Relative age and health of each spouse.
Often, a Hutchinson family law attorney asks the judge to sign findings of facts and conclusions of law. This separate document lays out the judge’s rationale for the amount and duration of alimony payments, as well as other issues in the case. If the judge does so, it may be easier to modify the spousal support obligation later, if need be.
Assume the judge awards Ramona significant short term spousal maintenance because she says she will attend school full time. If she drops out of school, her ex-husband Mike has a very good case for modification.
Changing the Amount and Duration of Payments
Generally, a Hutchinson family law attorney may ask the judge to move the amount and/or duration of payments either up or down. The law states that the judge may modify the amount if circumstances have materially and substantially changed. There are some subparts as well. In addition to new, the circumstances must be:
- Permanent,
- Involuntary, and
- Unanticipated.
Let’s return to Ramona and Mike and change the facts a little. Assume Ramona struggles in school and must reduce the number of hours she takes per semester. If she asks the court to extend the short term maintenance duration, a Hutchinson family law attorney faces an uphill climb.
Or, assume Mike starts a freelance consulting business and claims he can no longer afford to pay alimony. If he changed jobs to avoid paying alimony, he is probably not entitled to a reduction.
Work with an Experienced Lawyer
Some alimony rules are different in the New Year, and others are the same. For a free consultation with an experienced Hutchinson family law attorney, contact Carlson & Jones, P.A. Convenient payment plans are available.