How Does Alimony Work in a Maryland Divorce?

Posted by alvinrabin on April 25th, 2023

Alimony is a court-ordered payment that one spouse makes to another spouse during or after a divorce. It is intended to provide financial support to a spouse who cannot financially support themselves, either temporarily or permanently.

Understanding alimony is crucial in a divorce proceeding because it can significantly impact the financial outcome for both parties. It is important to know the types of alimony available, the factors considered in awarding it, and the procedures for modification or termination of alimony.

Understanding Maryland Law for Alimony Payments

The Maryland Code defines alimony as "payment or payments made by one party to a spouse or former spouse by a court order or marital settlement agreement, which payment or payments may be made periodically, or in a lump sum, or both." (Md. Code Ann., Fam. Law § 11-101)

In determining whether to award alimony and the amount and duration of any award, the court considers several factors, including but not limited to the following:

•        The ability of each party to be self-supporting;
•        The time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment;
•        The standard of living established during the marriage;
•        The duration of the marriage;
•        The contributions, monetary and nonmonetary, of each party to the well-being of the family;
•        The circumstances that contributed to the estrangement of the parties; and
•        The age of each party. (Md. Code Ann., Fam. Law § 11-106)

Maryland law recognizes four types of alimony:

1.       Pendente lite alimony, which is temporary support paid during the divorce proceedings to help the dependent spouse meet expenses;
2.       Rehabilitative alimony, which is awarded to help the dependent spouse become self-supporting within a reasonable period of time;
3.       Indefinite alimony, which is awarded when the court determines that the dependent spouse is unable to become self-supporting due to age, illness, infirmity, or disability; and
4.       Reimbursement alimony is awarded to compensate one spouse for contributions made to the other spouse's education, training, or career advancement.

Modification and Termination of Alimony in Maryland

Alimony may be modified or terminated in Maryland if a material change in circumstances warrants such a change. Examples of material changes in circumstances include a significant change in income or employment status of either party, the remarriage or cohabitation of the recipient spouse with a new partner, or a change in the recipient spouse's financial needs.

To modify or terminate alimony in Maryland, either party may file a motion with the court requesting a modification or termination of the alimony award.

In Maryland, cohabitation by the recipient spouse with a new partner may be grounds for terminating or modifying alimony. Cohabitation may be established by evidence that the recipient spouse lives with another person and is in a relationship similar to that of a married couple.

The payor spouse may file a motion with the court requesting a termination or modification of the alimony award based on the recipient spouse's cohabitation. The court will consider the motion and any evidence presented by the parties and decide based on the applicable law and the facts of the case.

Tax Implications of Alimony

Both parties (the payor and recipient) will face tax implications when alimony is a factor in their divorce.

Tax Implications for the Payor

In Maryland, alimony payments made by the payor spouse are generally tax-deductible, meaning that the spouse may deduct the amount of alimony paid from their taxable income.

However, certain requirements must be met for alimony payments to be tax-deductible, including that the payments must be made according to a court order or written agreement, and the payments must be made in cash or cash equivalents.

Tax Implications for the Recipient

In Maryland, alimony payments received by the recipient spouse are generally taxable as income, which means that the recipient spouse must report the amount of alimony received on their tax return and pay taxes on that income.

However, there are certain exceptions to this general rule, such as when the parties agree that the alimony payments will not be taxable to the recipient.

Hire an Experienced Maryland Divorce Attorney for Help with Alimony Determinations

If you are going through a divorce in Maryland and have questions about alimony, or any part of the process, it is smart to work with a Maryland divorce attorney. They can help with your case and ensure you receive the best possible outcome.