Common issues/questions that comes up in most if not almost all divorces are whether an individual will have to pay his or her soon-to-be former spouse alimony/support or whether an individual will receive alimony/support from his or her soon-to-be former spouse. If the answer to either question is yes, the immediate follow-up questions are how much alimony/support will be paid and for how long will the alimony/support have to be paid. There is not a simple answer to any of these questions as alimony/support in Pennsylvania is dependent on the specific circumstances of each divorce case.
In the context of a divorce action, there are three different types of support payments that a spouse could potentially have to pay the other spouse. They are Spousal Support, Alimony Pendente Lite (APL), and Alimony. Both spousal support and alimony pendente lite are paid prior to entry of the divorce decree or conclusion of the divorce action, whereas alimony is paid following entry of the divorce decree or conclusion of the divorce action.
An action for spousal support can be commenced prior to the filing of a divorce action provided that the parties have been living separate and apart; however, there are entitlement defenses, which if applicable, could preclude an Order for spousal support from being entered. An action for alimony pendente lite can only be commenced after the filing of a divorce action, and unlike spousal support, there are no entitlement defenses to the entry of an Order for alimony pendente lite provided the guideline calculations indicate that there is financial basis for alimony pendente lite. The guideline calculations for an Order for spousal support and alimony pendente lite are typically identical and result in an Order for the same amount; however, there cannot be simultaneous Orders in place for spousal support and alimony pendente lite. The guideline calculations for spousal support or alimony pendente lite are based on the parties’ net monthly incomes and/or earning capacities, and the guideline calculations also takes into account whether the parties have minor children that would be entitled to child support. For cases where there are no children, spousal support or alimony pendente lite are calculated by multiplying the difference between the obligor’s net monthly income and the obligee’s net monthly income by 40%. For cases where there are minor children, the difference between the parties’ net monthly incomes are reduced by the amount of child support which is then multiplied by 30% to arrive at the guideline calculation for spousal support or alimony pendente lite.
Unlike spousal support and alimony pendente lite, the calculation of monthly alimony following entry of a Divorce Decree is not subject to the Pennsylvania Support Guidelines. Rather, the issue of alimony in a divorce action is subject to the criteria set forth in 23 Pa.C.S. §3701(b) of the Pennsylvania Divorce Code. Pursuant to 23 Pa.C.S. §3701(b), there are 17 factors that the Court must consider in determining whether Alimony is necessary, and if so, the nature, amount, duration and manner of payment of alimony. Among the factors to be considered are the relative earnings and earning capacities of the parties, the duration of the marriage, the sources of income of both parties, and the marital misconduct of the parties during the marriage. In addition, alimony is considered a secondary remedy in a divorce action and will generally only be awarded where the Court deems it necessary.
It is also important to remember that many counties in Pennsylvania have their own “rules-of-thumb” that often apply to the determination of an alimony award in a divorce action. For instance, while the calculation of alimony is not subject to the Pennsylvania Support Guidelines, it is not uncommon in certain counties for the Court and/or Divorce Masters to utilize the Pennsylvania Support Guidelines to calculate the monthly amount of Alimony to be paid in a divorce action particularly where there is already an ongoing Order for spousal support or alimony pendente lite. In addition, some counties utilize certain ratios of years married to number of years that alimony is to be paid to determine the duration that alimony is to be paid post-divorce. Other things to be considered are whether an award of alimony shall be non-modifiable or modifiable in the future, and if so, under what circumstances the alimony can be modifiable.
Also, there have been some recent and significant developments with regard to Alimony in Pennsylvania which took effect on January 1, 2019. Alimony that was subject to an Order of Court or Property Settlement Agreement was deductible to the payor and taxable to the payee. However, that all changed for any Orders of Court or Property Settlement Agreements entered into on or after January 1, 2019 that contain provisions for payment of alimony as the alimony will no longer be deductible to the payor or taxable to payee. However, this does not apply to those individuals who continue to pay alimony or receive alimony in 2019 and in future years based on Orders of Court or Property Settlement Agreements that were entered into prior to January 1, 2019. For those individuals, the alimony payments will continue to be deductible to the payor and taxable to the payee. In addition, at least for now, it is presumed that any future modifications of provisions for alimony in Orders of Court or Property Settlement Agreements that were entered into prior to January 1, 2019 will continue to receive the same prior tax treatment.
This change in law obviously has considerable implications for the negotiation of divorce settlements as the payment or receipt of alimony is tax-neutral.
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