The question of whether to provide for alimony, how much to provide, and for how long often generates the most intense conflict during divorce negotiations.
While the recently approved Massachusetts Alimony Guidelines provide significant assistance in this area, problems persist, particularly with regard to the coordination and interaction of alimony and child support.
In general the alimony guidelines provide that alimony should equal between 30 and 35% of the difference in income between the parties. For marriages of less than 20 years the guidelines generally provide that alimony should last from 50% to 80% of the length of the marriage. The facts of each case must be carefully explored, as judges still have discretion in the granting of alimony, and there are significant exceptions and other criteria that may apply.
In general alimony is considered a taxable event, meaning that alimony is generally tax deductible by the party paying the alimony and taxable to the receiving party. In contrast, child support is a tax neutral event, meaning that child support is neither deductible by the paying party nor reportable as income by the receiving party. Consultation with a CPA to determine the precise effect of alimony on the parties’ tax situation is strongly advised.