One of the first questions I am asked during my initial consultations with new clients considering divorce is either “do I qualify for alimony?” or “do you think I will have to pay alimony?”. Every client that comes into my office has heard of alimony, but few actually understand how it works and what the potential tax consequences or benefits that might flow from an order of alimony.
Alimony is defined under Sec. 48 of the Massachusetts Alimony Reform Act as “the payment of support from a spouse who has the ability to pay, to a spouse in need of support for a reasonable length of time under a court order”.
Perhaps the vagueness of the definition accounts for some of the confusion people experience with alimony. At a basic level alimony is the payment of money from one spouse to another for the support of the lesser earning spouse. The amount of support is typically calculated by subtracting the income of the lower income spouse from that of the higher earning spouse and then calculating a number between 30-35% of that amount.
These calculations are not set in stone and can be subject to deviation based on a number of factors that can be found in M.G.L. chapter 208 §34.
There are many other considerations are relevant to the calculation of alimony that weren’t discussed here. Please check back soon for more information on alimony and tax implications.