Most Family Law/Divorce cases in the Sacramento County Superior Court will involve a need for the Court to make an order for either Child Support or Spousal Support for the maintenance of a former spouse or the children of a marriage. However, many people are unaware of a third option available to them. The parties can agree to have the support order designated as Family Support.
The real difference between Family Support and the combination of Child Support and Spousal Support is the tax effect of the support order. The Internal Revenue Service does not allow a tax deduction for the party required to pay child support. The party who receives child support does not have to pay taxes on the money they receive.
The situation is just the opposite with Spousal Support. This order is tax deductible to the person who pays support, and it is taxable income that must be reported on tax forms by the recipient.
A California Court can order support to be paid as Family Support if the parties both agree to the order. With Family Support, the amount of the order paid to the recipient will be higher than the amount paid if it was broken down into Child and Spousal Support amounts. The difference is that the entire amount paid will be tax deductible by the paying parent and taxable income to the recipient parent.
Family support orders are usually important where there is a big difference between the incomes of the parents. This order will give the paying parent more of tax break for their support and the parent who receives the support is usually in a lower tax bracket and does not need to claim the children for tax purposes.
People who are considering requesting a Family Support order should speak with their tax adviser or an experienced Family Law Attorney regarding this option. Family Support orders are often a good idea for parties, but they are definitely not for everyone.