Who Pays Taxes on Alimony (Spousal Support) in Florida?

• How does alimony work in Florida?
• Are there different types of alimony?
• Are alimony payments considered taxable income in Florida?
• References

The rule on who pays taxes on spousal support or alimony in Florida is the same as elsewhere in the country. Increasingly, a divorced individual receiving spousal support isn’t considered to have received taxable income, and the individual making those payments can’t treat them as tax deductible. 

However, many divorces are still in place that fall under the old rules, which worked differently. The major deciding factor is generally whether a separation or divorce agreement was finalized on or later than January 1, 2019. Those that are dated earlier fall under the old rules.

How does alimony work in Florida?

Like many other states, Florida allows the court to award alimony to either party in a divorce. The exact amount that is paid will be set by a judge. In Florida law, alimony may be one of four distinct types or a combination thereof.

Read: Guide to Spousal Support in Florida

A judge considers several factors when setting alimony or maintenance in Florida, including these:

• The duration of the marriage
• The standard of living established in the marriage
• The age and health of both parties
• The financial resources of both parties
• The ability of both parties to find suitable employment and, when applicable, the time needed for either party to become educated or trained to find appropriate employment
• The duties each party will have concerning any minor children they have together
• The tax results of whatever the final alimony order may have on both parties
• All income sources held by both parties
• Any other issue needed for fairness between the parties
•  

An alimony order should be taken very seriously. Aim to pay your obligation in full or at least to the maximum amount you possibly can. If you cannot pay your current alimony obligation, or if you believe circumstances have changed significantly enough that the current order is unfair, it’s important to continue trying to pay what is owed until you can get the order modified.

Modification usually requires help from a legal professional. 

Are there different types of alimony?

Florida law discusses several different types of alimony and allows for a combination of types to be awarded. 

Bridge-the-gap alimony

This alimony is intended to help an individual shift from a married life to a single life. It is relatively limited in scope. It is not to be awarded more than two years, and it is intended to address specific, recognizable, temporary needs of the receiving party. Bridge-the-gap alimony is not modifiable in amount or duration.

Rehabilitative alimony

Rehabilitative alimony is a temporary form of alimony designed to help a party gain the capacity to be self-supporting. It is designed to allow someone to redevelop skills or credentials they previously had or to acquire the schooling, training, or work experience needed to gain employment or credentials.

Durational

Durational alimony may be awarded when permanent alimony is inappropriate. Broadly, this alimony is ordered financial support is deemed appropriate by the court but permanent alimony would be excessive. It is often set following short or moderately long marriages, and it can be set for longer marriages if “there is no ongoing need for support on a permanent basis.”

Permanent

Permanent alimony lasts indefinitely, although circumstances exist that can end permanent alimony, such as the death of either party. Permanent alimony is intended to help support a party who cannot meet their needs alone after divorce. These funds are meant to provide the necessities of life following the end of a marriage. 

Technically, permanent alimony could be awarded after almost any length of marriage. However, it can be harder to prove that an ex-spouse would need alimony after a shorter marriage. 

Are alimony payments considered taxable income in Florida?

The Tax Cuts and Jobs Act of 2017 (TCJA) has made the discussion about whether alimony is taxable income a somewhat complicated question. 

The TCJA recently changed the tax law regarding alimony and taxes. Essentially, divorce or separation agreements dated January 1, 2019, or later treat alimony differently than agreements finalized before that date. 

Before January 1, 2019

If a divorce was finalized before the cutoff date and alimony was ordered, the payer can consider those payments tax deductible. The receiver can consider the money they’re getting to be taxable income. 

After January 1, 2019

If a divorce was finalized after the cutoff date, the rules differ. A person who pays alimony cannot get any tax deductions from those payments. A person receiving alimony doesn’t have to treat the payments they get as taxable income.

The TCJA is politically controversial, and some elements of it are likely to change over the coming years. However, as the rules stand now, it’s important to understand how they apply to you. When was your divorce finalized? This likely plays a huge role in which rules apply to you.

Failing to adhere to the rules as they apply to you could lead to legal and/or financial complications. Thus, it’s important to know how the TCJA affects you. If you’re unsure, consider talking to a financial professional.

Read: How 2017’s Tax Bill Changed How Alimony Is Taxed

References