The term “Family Support” is a strategy supported in California based upon IRS tax code. Family Support generally applies to the combination of child support and spousal support payments in a North County San Diego divorce settlement.
Under IRS tax code, child support is not taxable to the recipient, nor can it be deducted by the person paying child support. Spousal support however is taxed for the recipient, and tax deductible for the payor. If the Court orders “Family Support” the entire amount is taxable to the recipient, and tax deductible to the payor.
As a result, many recipients are not in favor of this option. However, the amount of “Family Support” is almost always higher than the combination of child support and spousal support calculated separately. It is possible to develop a “Family Support” option that is in the best interests of both parties, especially when you consider other property division concessions that are contained within the settlement agreement.
The increased amount of the “Family Support” payment may actually increase the net amount the recipient is able to keep after taxes. Combining spousal support and child support into a designated “Family Support” payment allows the payor to deduct the entire amount, thereby reducing the actual net amount of money required to meet spousal and child support obligations. This can be a win-win for both parties, but it requires expert guidance by experienced and proven family law attorneys.
The seasoned family law and divorce attorneys at Burke & Domercq, APC understand the complexities of support payments in divorce – especially in high asset cases or those involving business ownership. The key is to maximize the amount the recipient gets to keep while reducing the actual amount payed by the other party. This is an art that our attorneys have developed based upon extensive experience and expertise in child and spousal support matters here in North County San Diego.
