Many married couples choose to have one spouse be the primary income earner while the other spouse attends school, develops a new business venture, manages family and household needs, volunteers in the community, works on a part-time basis, or works in a rewarding but low-paying job. However, in the event of a divorce, this can leave the non-wage-earning or lower-paid spouse in a difficult financial position. Thus, the question of temporary spousal support can be an important factor to consider before filing for divorce. 

Standard Calculation for Temporary Spousal Support in Santa Clara County

When one spouse files for divorce, either spouse may ask the court for a temporary support order. Such decisions need to be made quickly to ensure that one spouse is not left destitute. Therefore, most judges use a standard formula to calculate the amount of monthly temporary support to be paid. 

In Santa Clara County, for example, the standard formula is:  (40% of the net income of the higher-earning spouse minus child support expenses) minus (50% of the net income of the lower-earning spouse). 

When a married couple decides to get a divorce, one spouse may be eligible to receive spousal support (also known as alimony) from their former partner. These payments allow a spouse who earns less to support themselves as they transition from married life to single life. Divorcing spouses should be sure to understand how California law applies to their situation as they determine their eligibility for spousal support.

Temporary vs. Permanent Spousal Support

After spouses have separated and begun the divorce process, the lower-earning spouse may file a motion asking for temporary spousal support to be paid while the divorce is pending. Each county uses its own methods for calculating this temporary support. In Santa Clara County, temporary support is determined by taking 40% of the paying spouse’s net income and subtracting 50% of the receiving spouse’s net income.

The Tax Cuts and Jobs Act was passed by the States Congress last December, resulting in the most major federal tax reform of the last 30 years. This law affects nearly everyone in the U.S., and discussion of some of its changes, such as a lowered corporate tax rate and an increased standard deduction, have filled the news as financial experts examine its impact. However, one lesser-known aspect of the law is important for divorcing couples to understand, since it will affect how spousal support (which is traditionally called alimony) will be taxed.

How Alimony Is Taxed

Previously, when a spouse who earned a larger income paid spousal support to their former partner, they would be able to deduct this amount from their taxable income, and the payments would be considered taxable income for the spouse receiving them. However, the Tax Cuts and Jobs Act changes this, so that alimony will now be treated like child support. For divorces finalized after December 31, 2018, spousal support will not be tax-deductible for the payor or taxable for the payee.

There are certain situations under California law where one spouse may be entitled to receive spousal support from the other spouse after a divorce. The point of spousal support – also referred to as alimony or spousal maintenance – is to provide income for a spouse who either does not work or was earning a much lower wage than the other spouse, such as where one spouse gave up their career to be a stay-at-home parent and raise the children.

Another purpose of alimony is to assist the lower-earning spouse in maintaining the standard of living they were accustomed to during the marriage until they are in a better financial position. In order to determine if support is warranted, the court will look at several different factors. The first factor is the gross income of the marriage. Under the California Family Code, income can include:

• Wages;
• Salary;
• Bonuses;
• Commissions;
• Dividends;
• Royalties; and
• Trust income.

Once the income of each spouse is determined, those figures are entered into an alimony calculator. The calculator also requires input of the length of the marriage. Under the law, if a couple has been married for less than 10 years, support will not be ordered for any longer than half the amount of years the couple were married. For marriages over 10 years, the amount of time spousal support may be an extended period, if not indefinite.

Life is always changing. Sometimes it takes unexpected turns that have profound and lasting consequences. Without the ability to foresee the future, it is impossible to plan every aspect of life completely. Two such instances are divorce and bankruptcy. California is very understanding when it comes to divorce and aims to ensure that both parties separate with equal financial footing, many times requiring the payment of spousal support or alimony. A bankruptcy filing can substantially alter maintenance requirements during divorce litigation or divorce mediation proceedings, many times requiring post-judgement modifications.

What Do These Terms Mean?

If a person is in bankruptcy status, the courts relieve them of paying these debts. During a divorce, bankruptcy may make it tough to make the necessary alimony payments. Many in this situation do attempt to use this status as a tool to avoid the fees. To see where there could be a dilemma, it is best to understand what each means.