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Is Alimony Taxable in Maryland?

Lebovitz Law LLC Aug. 25, 2022

Wooden blocks spelling out alimony next to coinsIt's not uncommon for a spouse to need financial assistance after a divorce. Perhaps one person worked and the other stayed home to take care of the children. During that time, the workforce changed drastically. After a divorce, the stay-at-home parent will need to develop new skills and find a job to support their needs. This is where alimony comes in. Many individuals rely on alimony payments to afford life’s necessities for a temporary or extended period. This funding is seen as a way to support the other party and help them get back on their feet. However, you probably have many questions about the alimony process. Is alimony taxable? What types of alimony are available to you? What happens if someone refuses to pay alimony? 

Divorce isn’t an easy process. At Lebovitz Law, LLC, our skilled attorneys can ensure that you’re aware of all your options. Furthermore, we’ll do everything we can to help you obtain the financial support you deserve. Whether you want to know if alimony is taxable or when alimony payments end, we can assist you. Schedule a consultation with our lawyers today for legal guidance you can count on.  

Is Alimony Taxable in Maryland?   

Prior to January 1st, 2019, alimony was considered taxable income in the state of Maryland. However, that is no longer the case due to the Tax Cuts and Jobs Act of 2017. Today, alimony is viewed as “tax neutral” like child support payments. If you receive alimony, it is not considered income and you are not required to pay taxes on it. However, the paying spouse must still pay full income taxes on the alimony amount. The 2017 act also removed the tax shifting provisions of alimony, which means that the payer can’t receive a deduction on their income for alimony. This makes alimony more expensive for the paying spouse. 

Any modifications to your agreement should reflect this change. Additionally, the document should clearly state the exact terms of your modifications and the fact that alimony is not considered income.  

Types of Alimony   

There are three main types of alimony in Maryland: 

  • Rehabilitative alimony. This type of alimony is only in place for a certain length of time. This gives the spouse the chance to find the means to support themselves. Once they have obtained the necessary training and skillset to earn a livable wage, they’ll no longer need financial assistance. 

  • Indefinite alimony. Indefinite alimony can continue for an indefinite amount of time. It is an ideal solution for those who cannot support themselves, or for couples whose lifestyles will be vastly different following a divorce. This type of alimony helps to equalize both parties’ financial status. It usually concludes upon the death or remarriage of the receiving party. 

  • Pendente lite alimony. Pendente lite translates to “during or pending litigation”. With this option, one party will only receive alimony temporarily during divorce proceedings.   

Where to Turn for Other Questions about Alimony  

In most cases, alimony is paid without any complications or additional legal proceedings. However, some individuals may fail to pay the alimony to the receiving party. If they are able to pay and choose not to, they may be held in contempt of court. They could also be subject to other penalties and even jail time.  

At Lebovitz Law, LLC, we can answer any questions you have about alimony or divorce. When you have an experience attorney by your side, you can rest assured knowing you’re in good hands. Our goal is to ensure that your life continues to move forward after a divorce is complete. 

Getting a Divorce in Maryland? The Attorneys at Lebovitz Law, LLC Can Help  

Is alimony taxable? What else should you know about getting divorced in Maryland? At Lebovitz Law, LLC, we understand how difficult the divorce process can be. If you’re seeking a divorce in Maryland, you’ll need legal assistance. Whether you are searching for an experienced lawyer to assist with your divorce, negotiating child support in Maryland or other issues, the attorneys at Lebovitz Law, LLC can help. If you have questions such as: is alimony taxable, please contact us at (410) 657-6494.