As a marriage ends, alimony emerges as a pivotal and frequently disputed matter. Alimony, or spousal support, denotes a court-mandated payment from one former spouse to the other, aiming to sustain the lifestyle established during the marriage. In New Jersey, alimony isn’t automatic, with several factors dictating the payer and the amount in a divorce.
What is Alimony Payment?
Alimony payments are periodic (usually monthly) payments made from one ex-spouse to the other as the court orders. The amount and duration of these payments depend on the factors discussed below and the specific circumstances of each case.
Alimony payments can be made directly between ex-spouses or through the court-administered Probation Division. Although less common, alimony may be paid in a lump sum.
Understanding the Purpose of Alimony
Before discussing who pays alimony, it’s essential to understand the purpose of these payments. Alimony aims to provide financial support to the lower-earning spouse, enabling them to maintain a lifestyle similar to what they had during the marriage. This support is particularly crucial when one spouse sacrifices their career or education to support the family or if there is a significant disparity in earning potential between the two spouses.
Factors Determining Who Pays Alimony in a New Jersey Divorce
New Jersey courts consider several factors when deciding who pays alimony and how much. These factors include:
- Income and earning capacity: The court compares spouses’ income and future earning potential.
- Length of the marriage: Generally, the longer the marriage, the more likely alimony will be awarded.
- Age and health of each spouse: If one spouse is older by a significant amount of time or has serious health issues that impact their ability to work and become self-sufficient, they may be more likely to receive alimony.
- Contributions to the marriage: The court considers each spouse’s financial and non-financial contributions, such as childcare, household management, and supporting the spouse’s career or education.
- Standard of living during the marriage: The court aims to secure a standard of living that will be reasonably comparable to what the parties enjoyed during the marriage.
- Time needed for lower-earning spouse to become self-sufficient: If the spouse needs time to acquire education or training to increase their earning potential, this may be factored into the alimony decision.
Types of Alimony in New Jersey
New Jersey recognizes several types of alimony, each designed to address different circumstances:
- Limited duration alimony: Awarded for a specific period, usually based on the length of the marriage.
- Open durational alimony: Continues until the receiving spouse remarries, cohabitates with a new partner, or either spouse dies.
- Rehabilitative alimony: Supports the receiving spouse while they obtain the education or training needed to become self-sufficient.
- Reimbursement alimony: Compensates a spouse who contributed significantly to the other spouse’s education or career advancement.
How Much Tax Do I Pay on Alimony Received?
As of January 1, 2019, alimony payments are no longer considered taxable income for the recipient or tax-deductible for the payer under federal tax law. This change applies to alimony orders entered on or after January 1, 2019, and to pre-existing order modifications if the modification states that the new tax rules apply.
The old tax rules still apply for alimony orders entered before January 1, 2019. Under these rules, the receiving spouse must report alimony payments as taxable income, while the paying spouse can deduct the expenses from their taxable income.
It’s essential to consult with a tax professional to understand the specific tax implications of your alimony payments, as each case is unique.
Modifying or Terminating Alimony in New Jersey
Alimony orders are not set in stone. If circumstances change significantly after the initial alimony order, either ex-spouse can request a modification or termination of alimony. Some reasons for modifying or terminating alimony include:
- The receiving spouse remarries or cohabitates with a new partner.
- The receiving spouse’s financial circumstances improve significantly.
- The paying spouse experiences a substantial decrease in income or financial hardship.
- The receiving spouse needs to make a reasonable effort to become self-sufficient.
Understanding Alimony with the Help of an Experienced Attorney
At Law Office of Andrew A. Bestafka, Esq., our dedicated divorce attorneys have extensive experience helping clients navigate the intricacies of alimony and other family law matters. We understand the financial and emotional challenges of divorce and are committed to providing personalized, compassionate representation to each client.
If you are facing a divorce or have questions about alimony in New Jersey, contact Law Office of Andrew A. Bestafka, Esq. today at (732) 898-2378 to schedule a consultation with one of our skilled family law attorneys. We are here to guide you through this challenging time and help you achieve the best possible outcome for your unique situation.