Philadelphia PA Alimony Attorney
When a couple separates they must begin to untangle the lives they built together and move towards a life where each party is able to live separate and apart. Alimony pendente lite (temporary alimony of APL) Alimony and spousal support may be available during the pendency of a divorce action and in certain cases for sometime after a divorce is finalized.
Alimony Pendente Lite
Alimony Pendente Lite or temporary alimony refers to monthly payments made by one spouse to the other spouse during the pendency of the divorce litigation. Typically, the spouse earning less than the other spouse is the recipient of Alimony Pendente Lite. Alimony Pendente Lite evolved from the concept that a husband should support his wife throughout the marriage and thereafter. The purpose of Alimony Pendente Lite today is to remain the status quo and permit the dependent spouse to have resources to support himself/herself during the course of the divorce litigation. A divorce action generally has to be commenced before a party has a right to request and receive Alimony Pendente Lite. Alimony Pendente Lite terminates upon the entry of a divorce decree.
Alimony is generally a court ordered obligation of a former spouse to provide support to the other former spouse after the marriage has ended and a divorce decree has been entered by the court. Alimony today is essentially need based and is not a penalty for marital misconduct. Alimony is discretionary and is awarded upon finding by the court that alimony is necessary to effectuate economic justice between the parties. There are many factors a court will consider in making a determination of whether alimony is necessary after the entry of a divorce decree some of which include the education, earning capacity, sources of income and assets and liabilities of the parties. The standard of living established during the marriage is also an important consideration in any alimony award.
Generally, adultery during the marriage will bar a spouse from receiving alimony after the entry of a divorce decree. Remarriage and co-habitation with another partner after the entry of a divorce decree may result in termination of alimony by law. Alimony can be amended or or modified upon application to the court. Alimony may be awarded for rehabilitative purposes to allow the dependent spouse with a lesser earning capacity time to obtain the skills, experience and employment to be able to support himself/herself.
Spousal support may also be available. Spousal support is generally defined as care, maintenance and financial assistance of one spouse by another spouse. Spousal support is distinct from Alimony Pendente Lite and may arise before a divorce complaint is filed because it arises from the marital relationship itself. Spousal support is temporary in nature and terminates upon the entry of a divorce decree.
If you are interested in learning more about Alimony Pendente Lite, Alimony or Spousal Support, please contact our firm and discuss your circumstances with one of our experienced Philadelphia family law attorneys.
How are Spousal Support and Alimony Pendente Lite Calculated in Pennsylvania?
In Pennsylvania, a dependent spouse is entitled to support once the spouses have separated and during the pendency of the divorce action. The two types of support which can be received prior to divorce are called spousal support and alimony pendente lite (“APL”). Although the amount due for the two types of support is calculated in exactly the same way, there is an important difference between them- spousal support is paid after the parties separate, but before a divorce is final, and may be ordered before a divorce action is even filed; APL is a temporary order for support which can only be made after the divorce action is filed.
A dependent spouse may receive either APL or spousal support, but cannot receive both at the same time. There is also a set term that the support lasts for- typically, this would be until a divorce decree is entered or a divorce agreement is reached. It is important to note that spousal support and APL are considered taxable income for the dependent spouse. On the other side, spousal support and APL payments can be deducted from the income of the payor for tax purposes.
When the Court orders that spousal support or APL must be paid, the amount owed is calculated by a statewide set of guidelines. The formula is located at Rule 1910.16-4 of the Pennsylvania Code, which also includes financial tables that can be used to determine the amount owed. The formula is based on the net monthly income of the parties, as follows:
Husband and Wife separate. They have no children. Husband’s net monthly income is $9,000. Wife’s net monthly income is $5,000. To apply the formula, you start with the difference between the two monthly incomes- in this case, the difference is (9,000 – 5,000=) $4,000. Because Husband and Wife have no children, the dependent spouse (in this case the Wife, who makes less than her husband) is entitled to receive 40% of that $4,000. Accordingly, the spousal support or APL owed would be $1,600 per month.
In Example 1, the divorcing couple has no children. However, in situations where there are minor children, it is likely that child support is being paid. Accordingly, in those situations the formula is adjusted to take into account child support payments.
Husband and Wife separate. They have twin five year old girls. Husband’s net monthly income is $8,000 and Wife’s net monthly income is $5,000. However, Husband is already paying $1,000 a month in child support. That $1,000 in child support is deducted from his monthly net income, leaving him with $7,000 a month. After accounting for the monthly child support payments, the formula is applied the same way as demonstrated in Example 1, by finding the difference between the two monthly incomes. In this case, the difference is (7,000 – 5,000=) $2,000.
A minor child also changes the percentage that is applied to the difference between the net monthly incomes. Instead of 40%, the dependent spouse is only entitled to 30%. In this case, the wife is entitled to 30% of the $2,000, or $600 a month.
There are factors which permit the court to deviate from this formula, such as unusual expenses or needs, but this happens much less often than simply sticking to the statutory formula. If there are any significant changes to one of the spouse’s circumstances after a spousal support or APL order has been entered (loss of job or becoming disabled, for example) a spouse may file a motion to modify the order.
Finally, it should be noted that one of the most important differences between spousal support and APL is that there are almost no defenses to a spouse’s claim for APL. In contrast, with spousal support, the spouse being ordered to provide the support can argue that the dependent spouse is not entitled to receive that support. These defenses usually arise in situations where the spouses have separated based on the fault of the dependent spouse, such as abuse or infidelity by the dependent spouse. However, even if a request for spousal support is denied based on one of these defenses, as soon as the divorce action is filed the dependent spouse can file for APL and that request will likely be granted.
An experienced family law attorney should be consulted for all questions or concerns about your obligations or rights regarding spousal support and alimony pendente lite.
How Will Alimony Payments Affect My Taxes?
Alimony (also called spousal support) is different from many of the other types of payments which are often made after a separation or divorce. Unlike child support payments or the proceeds of a property settlement, alimony counts as income. Accordingly, it is taxable as income.
This means that when tax time comes, the recipient of alimony must pay taxes on the receipt of such payments the same as any other income. However, it also means that the payor of the alimony is allowed to deduct the amount paid in alimony from his/her income for tax reporting purposes. In many instances this shift of income can result in a net tax savings for the two parties. Often, the ex-spouse receiving alimony payments are in a lower tax bracket than the ex-spouse who is the payor of the alimony. The tax rate the recipient pays on the income will accordingly be lower than the rate for the alimony payor would have been if he had not deducted the income.
As with all things involving the IRS, there are certain rules that need to be followed to ensure that alimony is taxable to the recipient and deductible by the payor:
- Put It In Writing. Make the alimony payments pursuant to a settlement or separation agreement, and make sure that those agreements state the exact amount to be paid and refer to the payment as alimony. Child support payments are not tax deductible, so make sure you label the purpose of the payments clearly and do not lump things together. Further, have the documents explicitly state that the payments will be deductible by the payor and taxable to the recipient.
- Maintain A Legitimate Separation. If you are still living with your spouse, or former spouse, alimony payments are not tax deductible. Also, if you and your spouse file a joint income tax return, you will not be able to deduct alimony payments.
- End The Payments At Death. Make sure your separation or settlement agreement provides that the alimony payments will terminate upon the death of the recipient/payee.
- Pay In Cash (Or Check). Giving your ex-spouse property with the same value as an alimony payment, such as a car or piece of furniture, will not count as tax deductible.
It is important to note that a small amount of cooperation is required by both ex-spouses when filing their taxes. The alimony payor will need the alimony recipient’s tax ID number when filing his taxes, so the IRS can double check how the payments are being reported by both parties. While cooperation between ex-spouses is not always the easiest thing to manage, the IRS offers some persuasion in this regard- an ex-spouse who receives alimony and refuses to provide his/her tax ID number to the alimony payor may face a $50 penalty.
What if you and your ex-spouse prefer (for whatever reason) that the alimony payments not be tax deductible by the payor and taxable to the recipient? In that case, you can come to a mutual agreement that alimony will not be paid at all, and instead the amount that would have been paid can be added to the non-tax deductible child support payment (assuming, of course, that there are children to support).
Finally, it is important for the alimony recipient to realize that the alimony is not being taxed on a weekly or bi-weekly basis. If the recipient does not make an increase to the amount of taxes being deducted from their regular paycheck, they may find that they owe the IRS additional funds come filing time.