Is there “alimony” in Texas is a common question by clients in our offices who are pursuing a divorce action. What we always explain to our clients is that there is spousal maintenance in Texas; however, it is not what they expect it to be.
Texas Courts may order spousal maintenance at the time of divorce only if the spouse seeking maintenance will lack sufficient property, including his separate property, on dissolution of the marriage to provide for his minimum reasonable needs and if certain other conditions are met. such maintenance may be granted if the party from whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence, as defined by the Texas Family Code section 71.004, committed during the marriage against the other spouse or the other spouse’s child and the offense occurred within two years before the date on which the suit was filed or while the suit is pending. alternatively, such maintenance may be granted if the spouse seeking maintenance is unable to earn sufficient income to provide for his minimum reasonable needs because of an incapacitating physical or mental disability or has been married to the other spouse for ten years or longer and lacks the ability to earn sufficient income to provide for his minimum reasonable needs or is the custodian of a child of the marriage of any age who requires substantial care and person supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for hi minimum reasonable needs. Texas Family Code section 8.051.
What is contractual alimony? The parties can agree to an alimony contract that is enforceable under Texas law as a contract. An affidavit of sponsorship for an alien spouse creates a contractual support obligation that the court cannot modify in certain Texas cases. Chapter 8 of the Texas Family Code and also provides that an order for maintenance or an agreement for periodic payments of maintenance voluntarily entered into by the parties and approved by the Court may be enforced by contempt. This provision applies only to agreements that would qualify for maintenance in both amount and duration under the Texas Family Code chapter 8. Courts do generally impose the $5,000.00 monthly cap and, generally, a limit of five to ten years. A Court can not order a wage withholding to enforce payment of contractual alimony. However, section 8.101 of the Texas Family Code allows withholding for agreed periodic payments to the extent that they do not exceed in amount or duration maintenance that the court could have ordered.
What about tax considerations? Federal tax treatment of alimony and separate maintenance payments differs depending on when the underlying decree or agreement was executed or, in some instances, modified. Under recent amendments to the Internal Revenue Code, longstanding provision regarding the deductibility and taxation of such payment will no longer be in effect for instruments executed after December 31, 2018, or for instruments executed on or before that date but modified thereafter if the modification expressly provides that the amended law applies to the modification.
Payments of alimony in cash can also be made by checks and money orders payable on demand Generally, transfers of services or property or the receiving spouse’s use of property owned by the payor spouse do not qualify as alimony. A husband and wife may designate payments that would otherwise qualify as alimony to be nondeductible by the payor spouse and nontaxable to the payee spouse by so stating in a qualifying written agreement.
For information on the tax consequences of alimony, see IRS Publication 504 which can be found at www.irs.gov/pub/irs-pdf/p504.pdf.