Alimony

DEFINITION of 'Alimony'

Payments made to a spouse or former spouse under a separation or divorce agreement. In the United States, each state sets its own laws on how alimony is awarded and paid. Whether alimony will be awarded and how much it will be is determined by factors such as the length of the marriage, the spouses' relative incomes and the spouses' financial prospects.

BREAKING DOWN 'Alimony'

For the receiver, payments are considered taxable income; for the payer, they are a deductible expense. Alimony should not be confused with child support. Alimony payments are specifically meant to support a spouse or former spouse, while child support payments are specifically intended to support one or more children from a dissolved relationship or marriage. Neither alimony nor child support payments may be discharged in bankruptcy.

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RELATED FAQS
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