Can Spousal Support Be Deducted Pre-Tax

[archibald]

FYI: My partner and I live in California, and my partner works for the federal government.

How exactly is spousal support deducted from the supporter's paycheck? Can he have it taken out before his paycheck is taxed so that his taxable income is reduced in that check, or does he have to pay the support after he has had tax deducted?

I lost my job right after my partner decided to divorce me, so I'm living on spousal support and unemployment compensation. He makes a six-figure income and agreed to pay me $3500 a month for half the length of the marriage. I thought we would be eligible to file our taxes jointly in the 2010 tax year, so I agreed to accept $2500 a month because I figured that he would have about $1000 withheld in taxes on that amount.

Well, that was back when I thought that our assets would be shared assets. I've just found out that we cannot file our taxes jointly next year after all. Now he says that when he files as a single person next year, he will declare his spousal support as nontaxable income, and I will have to pay tax on the support that I do receive. But this means he's keeping $12,000 a year that he agreed to pay out to me, money that was meant to be paid out in tax on the spousal support.

So I'm wondering if he can arrange to transfer the full amount, $3500, to me before tax is withheld. I know he can't afford to give me that amount after the tax is already withheld. Or should he reduce his withholding and then transfer the full amount??

BTW, I don't want to punish him, just get what the attorney said was fair and reasonable. (I only consulted an attorney once; I couldn't afford to retain him.) With my current medical expenses, the spousal support is not enough for me to live on. It's a good thing I'm getting unemployment checks, or I would be so screwed. But I really will be screwed next tax season if my ex keeps the $12,000 that was supposed to pay for the tax on this money. He doesn't see what the problem is. I've tried to explain, but I'm not getting through.

Anyway, I hope this makes sense. I feel like I'm really out of my depth here.

[Mr. Knowitall]

Spousal support is taxable as income to the recipient. (This is in contrast with child support, which is taxable as income to the payer.) It does not matter at all how much your ex's employer takes out of his paycheck - that will vary depending upon how many dependents he declares, and if too much is taken out he'll get a larger refund, but even if he's nomintally "taxed" on money that goes to you as spousal support that's something that will be corrected when he files his taxes and identifies the money to have been spousal support paid to you.

I have no way of knowing if we're talking about court orders here, or agreements between the two of you. Obviously if you agreed to accept less than the court ordered based upon your erroneous belief that you wouldn't pay taxes on your spousal support, you will want to go back to the terms of the court order.

[archibald]

Unfortunately, all we have at this point is a verbal agreement. He says he can't afford to contest what I ask for, so I'm filing a support request for the full $3500. But our divorce won't be finalized before early October. In the meantime, well, he has a recent history of somewhat erratic behavior where our relationship is concerned, and I don't want to piss him off and lose my current support. I can't live on unemployment, and the only job offer I've gotten so far in my field is part-time and temporary (seven lousy weeks)--and doesn't start for another two months.

I know that if he gives me support that is not ordered by the court, I can always say that the money was a gift, and he can't escape paying tax on it. This is my ace in the hole. I would hate to use it, though, even as a threat.

I just want to make sure that he has enough net income, after spousal support and the usual deductions, to meet his own needs. But I guess it's up to him to set up his withholding so that he can do that. I have to look out for my own needs first.

This divorce was his idea, not mine. Not that that has anything to do with it, but I get frustrated that he thought he could cut me loose with a couple thou and a recent job loss, and just go on his merry way as if we had never been married. Ever since he found out I wasn't going to allow that, he has taken every opportunity to gripe about it, and he frequently gives me attitude and snark when we meet to conduct business. He feels that I'm taking advantage of him when I'm just trying to survive. I feel guilty as hell asking for support, but the job market sucks right now and I don't know what else to do. Anyway, it's only for a couple of years. We weren't married that long.

Sorry about all the whining. I'll stop now.