Spousal and Child Support

Question 1

Arrearages

Answer 1

The difference between the amount of spousal or child support paid, if any, and the amount required under court order.

Question 2

Childcare Credit

Answer 2

A nonrefundable childcare tax credit available to the custodial parent who pays for child or dependent care expenses so that they can be gainfully employed

Question 3

Child Contingency Rule

Answer 3

States that if any amount of spousal support specified in the divorce decree is reduced: (a) upon the happening of any contingency related to the child; or (b) at a time that can be clearly associated with a contingency related to the child, then the amount of the reduction will be treated as child support, rather than spousal support. These payments will be considered child support when the payments begin. (IRS Code Sec 71(c)(2))

Question 4

Child Support

Answer 4

The amount of money paid by a non-custodial parent to the custodial parent for a child’s day-to-day expenses and other special needs. Each state is required by Congress to have written child support guidelines and enforcement procedures.

Question 5

Child Support Guidelines

Answer 5

A series of mathematical formulas used to calculate the amount of child support to be paid in some cases. Congress has mandated that states adopt child
support guidelines and support enforcement procedures.

Question 6

Custodial Parent

Answer 6

The parent with whom the child(ren) live the majority of the time. A distinction should be made between a Legal Guardian (who has the ability to make legal
decisions on behalf of the child) and the Custodial Parent: Technically, a Legal Guardian may have no custody rights at all.

Question 7

Custody

Answer 7

Usually refers to the parent’s right to (1) have a child live with that parent and (2) make decisions concerning the child. Exact meaning varies greatly in
different states. The court awards custody to one parent, which is called Sole Custody, or grants Joint Custody, allowing both parents, the right to physical care,control, or direct physical supervision of the children.

Question 8

Garnishing

Answer 8

The act by which support money is obtained from the non-paying spouse’s employer, who draws that amount from his/her employee’s paycheck

Question 9

Joint Custody

Answer 9

The children live with the residential custodian and visit with the non-residential parent. Both parents have an equal say in major decisions affecting the
children and decisions can only be made with notice and consent. (See also “Sole Custody.”)

Question 10

Maintenance

Answer 10

Same as spousal support and alimony.

Question 11

Modification

Answer 11

A change in the judgment based on a change in circumstances.

Question 12

Multiple-Reduction Rule

Answer 12

Second provision in the Child Contingency rule when there is more than one child. If spousal support payments are reduced on two or more occasions, which occur not more than one year before or after each child reaches a certain age, then it is presumed that the amount of the reduction is child support. The age at which the reduction occurs must be between 18 and 24 inclusive and must be the same for each of the children.

Question 13

Non-Custodial Parent

Answer 13

The parent with whom the children do not live the majority of the time

Question 14

Physical Custody

Answer 14

The parent with whom the children will primarily reside. (See also “Custodial Parent.”)

Question 15

Primary Caregiver

Answer 15

A factor in consideration of who should be the custodial parent, the person who usually takes care of the children.

Question 16

Rehabilitative Maintenance

Answer 16

Temporary financial support given to an ex-spouse until they are able to earn a sufficient amount to support themselves

Question 17

Revenue Act of 1942

Answer 17

Requires certain spousal support payments to be included in the recipient spouse’s income and permitted the payor spouse to deduct these payments as an itemized deduction.

Question 18

Section 32 EITC IRC

Answer 18

This section of the IRS Code states that the custodial parent is entitled to an increased earned tax income credit if he or she has a qualifying child and meets the
requirements.

Question 19

Section 71 Payments

Answer 19

This section of the IRS Code states that alimony and separate maintenance payments are generally taxable to the recipient and deductible from gross income by
the payor. These payments can be treated as alimony for tax purposes if:
The payment is made in cash, check, or money order.
There must be a written court order or separation agreement.
The couple may not agree that the payments are not to receive alimony tax treatment.
They may not be residing in the same household.
They may not file a joint tax return.
No portion of the payment may be considered child support.
Additionally, Section 71 requires that if the payor of alimony wants to deduct alimony payments over $15,000 per year, payments must last for at least three
years. If this requirement is not met, payments are subject to recapture rules.

Question 20

Six-Month Rule

Answer 20

Provision of the Child Contingency Rule that states when the spousal support payments are to be reduced not more than six months before or after the date on
which the child reaches 18, 21, or the age of majority in their state. (IRS Code Sec. 71(c)(2))

Question 21

Sole Custody

Answer 21

The custodial parent has the power to make all decisions, both day-to-day and major decisions concerning the child’s health, education, and welfare without consulting or notifying the non-custodial parent.

Question 22

Spousal Support

Answer 22

Money paid by one spouse to the other for the recipient’s support following the divorce. Support may be mandated for a specific period of time (long-term or
short-term) and is based on the needs of the recipient, ability to pay, and economic differences between the partners. Also called alimony or maintenance. (See
also “Section 71.”)

Question 23

Spousal Support Recapture

Answer 23

Under Internal Revenue Code (IRC) § 71, recapture requirements apply if excess alimony (also commonly known as “spousal support”) payments are frontloaded into the first three post-separation years.

Question 24

Spouse

Answer 24

Husband or wife.

Question 25

Standard of Living

Answer 25

A factor when determining spousal support, allowing the recipient an adequate amount to maintain their current lifestyle.

Question 26

Tax Cuts and Jobs Act (TCJA)

Answer 26

The Act signed into law in December 2017, that made signicant changes for individual and business taxpayers. Changes included reduction of the personal
exemption to zero, increase in the standard deduction amounts and major changes to itemized deductions.

Question 27

Tax Reform Act of 1976

Answer 27

This Act permitted spousal support to be deductible in arriving at adjusted gross income so that the tax payer who does not itemize deductions may
nevertheless deduct spousal support.