Divorce: Child Support and Alimony

Alimony
Alimony is support that an ex-spouse is required to pay to a former mate as provided in a divorce or separation agreement or other written agreement. There are many different ways to handle payment of this amount. Payments can be made on a monthly basis or in one lump sum. Monthly payments are better for budgeting purposes and the payments are tax-deductible to the payer and taxable to the recipient. On the other hand, taking an alimony settlement in one lump sum ensures that the recipient will in fact receive the total amount agreed upon. Monthly payments generally cease upon the remarriage of the recipient, but payments do not cease if the payer remarries or co-habitats with a new partner.

Child support
Child support laws differ by state. As a general rule, payments are based on the needs of the child, the parents' income, and the percentage of time the child spends with each parent. Payments typically continue until your child graduates from high school or is no longer a minor. Child support is not taxed as income to the recipient, and the payer cannot deduct it on his or her tax return.

Unfortunately, fewer than half of all those who are awarded child support get the full amount that they are entitled to. Penalties for non-payment are getting tougher and laws for enforcing these payments are getting stronger. But the fact remains that for many, child support is not a source of income that they can count on.