Alimony, also referred to as spousal support, is financial support paid by the spouse with the highest income to the spouse with the lowest income after a divorce or separation.
Alimony is not an automatic entitlement and is typically only awarded when one spouse’s income is considerably higher than the other spouse’s income, or if that spouse has not worked for quite some time.
The purpose of alimony is to enable the spouse with the lowest income to maintain the same standard of living they enjoyed during the marriage, while working towards being financially independent.
You and your spouse may come to an agreement on the amount and duration of alimony to be paid, or go to court and have a judge decide for you.
Alimony is usually paid in monthly installment and until:
- The length of time stated in your divorce decree or settlement agreement expires;
- The recipient remarries;
- The children reach the age of independence;
- A judge determines that the recipient has not made enough effort to become financially independent;
- Retirement—in some cases; or
- The death of a spouse.
Alimony is tax deductible for the payor and treated as taxable income for the recipient. Thus, it is essential for you to maintain sufficient records of whether you paid or received alimony.
Disputes between spouses over how much alimony has been paid are not uncommon. In addition, your claim of having paid alimony may be challenged by the IRS at their discretion.
In the absence of documentation to prove how much alimony you received or paid, you may lose the ability to deduct your alimony payments from your taxes, or be forced by the court to pay back alimony if your spouse claims he or she has overpaid you.
In an effort to avoid disputes over the amount of alimony that has been paid, both the payor and the recipient of alimony should maintain a record of all payments made or received.
The payer should maintain a list of each payment made, including:
- The date it was made;
- The check number;
- The address to which it was sent; and
- The original canceled checks used to make the payment.
Also, make note of the month for which the alimony payment was made. If you made the payment in cash, get a signed receipt from the recipient.
Finally, you should keep these records no less than three years from the date you made the tax deductions.
The recipient should maintain a list of each payment they received, including:
- The date you received the payment;
- The amount of the payment;
- The check number;
- The bank and account number from which the check was drawn; and
- Copies of the checks, or the signed receipts you gave for any cash payments.
Contact an experienced family law attorney
If you are involved in a dispute over alimony payments, or need more advice on what records of alimony payments you should maintain, contact an experienced family law attorney for assistance. Most family law attorneys offer a free, no-cost, no-obligation consultation.