How Is Alimony Affected By The Tax Cuts And Jobs Act
If you are reading this article before the end of 2018, then alimony is still tax-deductible and taxed as income under Federal Law. However, if your alimony order or separation agreement was entered after December 31, 2018, then under the Tax Cuts and Jobs Act, your alimony will no longer be tax-deductible and you will no longer have to report the alimony you receive as taxable income.
This means that for some of you, you will want to get your alimony agreement hammered out before the end of 2018, and if you are looking to receive alimony, then you may want to wait until next year .
This is because the Tax Cuts and Jobs Act eliminates the long-standing deduction for alimony in post-2018 separation agreements or court orders. In addition, if you are the recipient of alimony, you will not be required to include it in your taxable income after 2018.
What Will Bar You From Receiving Alimony
If you file for absolute divorce but do not state a claim for alimony in your Complaint, you will be barred from receiving alimony.
If you sign a Separation and Property Settlement Agreement containing a waiver of alimony clause, all alimony claims are barred.
If it is proven that you, as the dependent spouse, committed adultery, you are barred from receiving alimony. (Note: Conversely, if you are the supporting spouse and it can be proven that you committed adultery, the dependent spouse need only request that alimony be ordered. If both parties commit adultery, the award of alimony is at the Courts discretion.
Video: Im Concerned About The Issue Of Alimony How Is Alimony Calculated
In North Carolina, spouses may have a legal duty to pay alimony that is, financially support their ex-spouse after the date of separation.
Alimony may be paid in a lump sum or on a monthly basis. There is no specific formula for determining the amount and duration of alimony, but if your case is in court, the judge will consider a number of factors in deciding how much alimony should be awarded and, if monthly alimony is ordered, how long payments will continue. For a spouse to qualify for alimony, a judge must find that one spouse is the supporting spouse, the other spouse is the dependent spouse, the dependent spouse needs financial support, and the supporting spouse has the ability to pay alimony.
Read Also: Cost Of Uncontested Divorce In Texas
How Do North Carolina Courts Calculate Post
As mentioned earlier, the dependent spouse may be entitled to post-separation support while the divorce case is pending. Post-separation support is automatically terminated once the court decides whether or not to award alimony.
In North Carolina, courts consider factors outlined in North Carolina Gen. Stat. § 50-16.2A when awarding and calculating post-separation support. Courts evaluate the spouses:
- Financial needs and resources
- Ability to work and earn a living
- The standard of living established during the marriage
- Current employment
- Recurring earnings and necessary expenses
Before ordering post-separation support, the judge will determine if the higher-earning spouse has the ability to pay.
North Carolinas Statute Defines Cohabitation As:
- The act of two adults dwelling together continuously and habitually
- in a private heterosexual relationship, even if not married, or a homosexual relationship
- evidenced by the voluntary mutual assumption of those marital rights, duties and obligations which are usually manifested by married people, and which include, but are not necessarily dependent on, sexual relations
You May Like: Move Out Of State To Avoid Alimony
Alimony Based On Marital Misconduct
While North Carolina does not take marital misconduct into consideration for divorce proceedings, it can play a big role in alimony calculations. Marital misconduct within a marriage can be an automatic approval or denial of alimony for the dependent or supporting spouse. Consult with your family law attorney to find out how marital misconduct can affect your spousal support case.
How Does Illicit Sexual Behavior Affect Alimony In Nc
In North Carolina, whether or not one of the spouses engaged in illicit sexual behavior can have a profound effect on the award of alimony. Before we discuss what that effect is, it is important to understand what illicit sexual behavior is so that you can avoid this problem altogether.
Illicit sexual behavior is listed as a type of Statutes. And although many of the other acts of marital misconduct may play a small role in the amount and duration of alimony, none of them have as big an effect as illicit sexual behavior.
The NC statutes define illicit sexual behavior as:
acts of sexual or deviate sexual intercourse, deviate sexual acts, or sexual acts defined in G.S. 14-27.20, voluntarily engaged in by a spouse with someone other than the other spouse
Basically, illicit sexual behavior is the act of having sex with someone else outside of the marriage. And in North Carolina, doing this is a very bad thing if you are in the position to pay alimony, and even worse if you should be receiving alimony.
Don’t Miss: How Long Does Alimony Last In Texas
How Is Alimony Calculated Are There Alimony Guidelines
Although guidelines are often used to calculate child support, there are no guidelines for awarding alimony in North Carolina. The amount of alimony varies widely. Alimony is to be paid in such amount as the circumstances render necessary, having due regard to the factors set out above. For example, if a couple had a high standard of living in a long-term marriage in which one spouse stayed home to raise the couple’s children, that might justify a significant award to the homemaker. On the other hand, if both spouses worked, their marriage lasted only a few years, and they have no children, alimony is much less likely.
You and your spouse may decide on your own that one of you is entitled to receive alimony payments. If you are unable to agree on the matter, then you can submit the issue to the court for a decision. Whether alimony is arranged by agreement or ordered by a court, it is taxable to the recipient spouse and tax deductible to the payor spouse.
When Does Alimony Stop
There are several situations in which alimony will automatically stop in North Carolina. The first, and most common is where the duration for the alimony payment ended.
In addition, alimony in NC will terminate upon the occurrence of one of the following events:
1. When the receiving spouse gets remarried
2. When the receiving spouse moves in with someone in a marriage-like relationship
3. When either spouse passes away.
The biggest conflict with these triggering events is the cohabitation trigger.
Also Check: How To Stop Alimony Payments In Florida
Paying Alimony In North Carolina
Once the court decides the amount and duration of alimony, there are different payment methods available to the spouses. Supporting spouses can pay in one lump sum, in monthly or quarterly payments, an income withholding order, or even through a transfer of property. If you fail to pay alimony, the court may order you to pay fines, fees, or order you to spend time in jail. If you’re a recipient of alimony and not receiving payment, you can file a formal request for enforcement with the court. .)
Why Do Courts Award Alimony
Often, one spouse chooses to pass up income and career development opportunities for the good of the household. When the couple separates unexpectedly, the spouse who made these sacrifices suddenly has no way to support themselves and maintain the same lifestyle theyre used to.
Meanwhile, the spouse who has more income benefited from the sacrifices the other spouse made throughout the marriage. The higher-earning spouse probably wouldnt have been able to earn as much money and advance their career if the other spouse hadnt devoted time to taking care of children or otherwise supporting the household.
So, the idea behind alimony is to let both spouses walk away from the marriage on equal footing while they figure out a path forward. How long alimony lasts usually depends on the length of the marriage.
For example, lets say a couple was married for 20 years and had three children. One spouse gave up their career at the start of the marriage to provide childcare and daily household duties, and that spouse never resumed their career.
In that case, the spouse who made the sacrifice gave up a huge amount of potential earnings and career advancement for the good of the family. It will take a long time to compensate that spouse for those sacrifices, so alimony payments in a case like this could go on for many years or might even last indefinitely.
Recommended Reading: Cost To File For Divorce In Indiana
We Can Help You Decide On A Fair Agreement
Under North Carolina law, alimony is financial support provided by one spouse to the other. An award of alimony can be indefinite or can be in place for a fixed period of time. Long ago, alimony was only payable from a husband to wife to compensate her for time during the marriage, but current law states that alimony can be payable from a husband to wife or from a wife to husband.
Miller Bowles Cushing can provide you with a lawyer that has the experience, and skill needed to achieve a positive outcome.
Contact us online or call us at 704-810-1400 to schedule a consultation with a trusted Charlotte alimony lawyer today.
How Long Does Alimony Last In North Carolina
It depends on several factors. A judge ultimately decides the amount and the duration in a North Carolina family court. In addition to several statutory factors, judges can consider any other relevant factor that may also impact awarding alimony.
Absent any other extreme circumstances, a general rule of thumb is that alimony length usually equals one year of alimony paid for every three years of marriage. For example, a marriage that lasts nine years may result in an alimony award of three years.
Also, remember that alimony can modify or terminate early if certain actions warrant it, such as
remarriage or cohabitation of the receiving spouse or the death of either spouse.
Read Also: Changing Your Last Name After Divorce
How Do The North Carolina Courts Determine The Amount And Duration Of An Alimony Award
The judge will determine the duration and amount of alimony based on certain factors. In North Carolina, the judge is given wide discretion on how alimony is decided. He or She will base the decision on factors such as:
- The duration of the marriage
- One spouses contribution to the education or earning power of the other
- Debt and legal obligations of each spouse
- Property bought during the marriage
- Contributions as a homemaker
Holding Every Client In The Highest Esteem
With two different offices and more than 35 attorneys at work, our team members contribute a magnitude of insight that stems from a wide variety of legal background and experience. Whether business law, trusts, estate planning, elder law, or litigation our team consistently delivers sophisticated legal work.
Van Winkle is committed to advancing, cultivating, and preserving an organizational culture of diversity, equity, and inclusion. We strive to create a workplace where our employees, clients and business partners can thrive.
You May Like: How Long Do You Have To Married To Get Alimony
How Long Does Alimony Last In North Carolina When Will Alimony Payments Stop
Alimony in North Carolina does not have to be indefinite. The length of time that a supporting spouse is required to pay alimony usually depends on the factors that determine alimony eligibility. In most cases, the court will award alimony for the duration of half the length of the marriage. For example, if a couple was married for 10 years, the dependent spouse would get 5 years of alimony. But, the court may deviate from this at any time depending on the circumstances of each spouse.
Alimony payments will stop on the date that is written in the court order. Otherwise, payments will stop when one of the following events occur:
The 16 Factors That Impact Alimony In Nc
There are 16 factors that the Court must consider when deciding on the amount and duration of an alimony payment. These factors include:
The marital misconduct of either of the spouses.
The relative earnings and earning capacities of the spouses
The ages and the physical, mental, and emotional conditions of the spouses
The amount and sources of earned and unearned income of both spouses, including, but not limited to, earnings, dividends, and benefits such as medical, retirement, insurance, social security, or others
The duration of the marriage
The contribution by one spouse to the education, training, or increased earning power of the other spouse
The extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child
The standard of living of the spouses established during the marriage
The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs
The relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support
The property brought to the marriage by either spouse
The contribution of a spouse as homemaker
The relative needs of the spouses
The federal, State, and local tax ramifications of the alimony award
Read Also: Divorce Mediation Lawyer Manhattan Beach
How Is Alimony Determined
One of the most contentious issues couples might face when divorcing is alimony. Also known as spousal maintenance or spousal support, alimony is paid by the higher-earning spouse to the financially dependent spouse. Although it may seem like a straightforward concept, there are many factors a court will consider in determining an alimony award including the needs of the dependent spouse and the supporting spouses ability to pay.
Types Of Spousal Support North Carolina Courts Award
Courts in North Carolina may award post-separation support or alimony after finalizing a divorce. Post-separation support is awarded in a divorce proceeding and the supporting spouse continues to pay until the earlier of any of the following:
- The specified date in the post-separation support order
- The entry of an order to award or dent alimony
- The dismissal of the claim for alimony
- Termination of post-separation support as per North Carolina alimony laws
- The entry of a final decree of absolute divorce if no alimony claim is pending when the judge enters that decree
Either spouse may request post-separation support and the requesting spouse must state the factual basis for the requested support.
Considerations of the Court
Before making a decision regarding a request for post-separation support, a court shall consider the following:
- The financial needs of both spouses
- The spouses accustomed standard of living
- The incomes and recurring earnings of each spouse
- The earning abilities of both spouses
- The marital and separate debt obligations of the spouses
- The expenses necessary for the support of each spouse
- Each spouses legal obligations to support the other spouse
Except where the court establishes marital misconduct by the dependent spouse, a spouse is entitled to a post-separation support award if their resources arent adequate to meet their reasonable needs.
You May Like: Where Do I File For Divorce In Houston Texas
Find Out How Courts In North Carolina Decide Whether To Award Alimony When A Couple Divorces
Like most states, North Carolina allows a court to award alimony when a couple divorces. The court must consider a list of factors in deciding whether an alimony award is appropriate, how much to award, and for how long. This article answers some common questions about alimony in North Carolina. For all of our articles on North Carolina divorce law, see our North Carolina Divorce and Family Law page.
What Constitutes Marital Misconduct In Nc
NC alimony laws make it clear that a judge considers marital misconduct when making a decision regarding alimony. is certainly a broad term, but it covers any of the following acts:
- Illicit sexual behavior, which means acts of deviate sexual intercourse or deviate sexual acts, or other sexual acts defined in the General Statutes 14-27.20, voluntarily engaged in by either spouse with another person other than the other spouse
- Abandonment of one spouse by the other
- Involuntary separation due to the criminal act committed by one spouse before the alimony proceedings
- Malicious and willful abandonment, especially where a spouse has been physically or emotionally abandoned. It is also known as malicious turning out of doors.
- Indignities that result in an intolerable and life burdensome condition for the other spouse
- Barbarous or cruel treatment that endangers the life of the other spouse
- Deliberate destruction, diversion, waste, or concealment of marital assets, or the reckless spending of a spouses income by the other
- Drug abuse or excessive use of alcohol to make the other spouses condition life burdensome and intolerable
- Willful refusal to provide the other spouses necessities according to their condition and means to make their life unbearable
Also Check: How Much Does An Amicable Divorce Cost