Spousal Support in Virginia
Spousal support issues arise in Virginia divorces where the parties have been married for a substantial length of time and there is a significant gap in their incomes. In these cases, determination of a proper amount and duration of spousal support (called “alimony” in other states) can become very difficult.
How Do Courts Determine Spousal Support in Virginia?
Virginia courts must first determine whether the party seeking spousal support is eligible to receive it—by looking at the factors and circumstances that contributed to the dissolution of the marriage. Adultery by one spouse will usually, although not always, bar that spouse from receiving spousal support. See Adultery and Divorce in Virginia.
If the party seeking spousal support is not barred from receiving it, the court must then determine the nature, amount and duration of a potential spousal support award, by considering the factors found in Virginia Code § 20-107.1. These factors include: the incomes and financial needs of both parties, the duration of the marriage, the standard of living established during the marriage, etc. An important factor in many cases is: “[t]he decisions regarding employment, career, economics, education and parenting arrangements made by the parties during the marriage and their effect on present and future earning potential, including the length of time one or both of the parties have been absent from the job market.
Voluntary Unemployment or Underemployment
Virginia law allows the court to find a party is voluntarily unemployed or voluntarily underemployed, and to calculate spousal support based on a higher income than he or she is actually earning. For more information, see Voluntary Underemployment In Virginia Support Cases.
Duration of Spousal Support
Under Virginia Code § 20-107.1, the same factors that govern the court in determining an amount of spousal support also govern it in determining the duration of support. The Virginia Court of Appeals recently reiterated the importance of the those factors in setting a duration for spousal support, in the Fairfax County divorce case Cleary v. Cleary.
The parties in Cleary were married for 17 years and had three children during the marriage. Both parties were employed, with the husband working as a financial advisor and the wife working as an independent contractor. The court granted the wife a divorce on adultery grounds, and made a spousal support award of 15,000 per month for 60 months. In formulating the amount of the award, the court made a detailed finding using the factors outlined in the Code, but failed to specify why the award was for a period of five years. In other words, the court used the factors found in Virginia Code Section 20-107.1 to justify the amount, but not the duration, of support. On appeal, the wife challenged the duration.
The Court of Appeals overturned the five-year alimony award, finding that pursuant to Virginia Code § 20-107.1(E) the trial court is required to identify specific factors when it sets a limited duration award. The court reasoned that this is necessary for not only consistency between cases, but also for potential modification of an award.
As a practical matter, the Cleary ruling pushes parties to provide specific reasoning to the court for not only the amount of spousal support but also for any set duration of support. This reasoning could be the amount of time it takes a party seeking support to complete school or even the amount of time before minor children are school age. Failure to do so may make it difficult for the court to connect the Code factors to the duration requested—leaving the court no ability to limit support to a set duration.
In other words, if you are the party who seeks to limit spousal support to a defined duration, the burden is on you to connect the duration you request to the factors found in Virginia Code § 20-107.1.
Tax Consequences of Spousal Support
Prior to January 1, 2019, spousal support payments were usually considered taxable income to the payee and tax-deductible by the payor. This was an important consideration in any spousal support case, especially given the fact that the parties are usually in different tax brackets.
The Tax Cuts and Job Act (TCJA) was enacted by the federal government in December of 2017. The TCJA includes many changes to the manner in which individuals are taxed and the types of deductions that individuals may claim on their tax returns. One of the TCJA’s most significant changes was its elimination of the deductibility of spousal support.
As of January 1, 2019, the payor of spousal support can no longer claim a deduction for the payments on the payor’s tax return if:
- the parties’ marital settlement agreement was executed after December 31, 2018; or
- the parties’ final order of divorce was entered after December 31, 2018; or
- the agreement was executed on or before December 31, 2018, and was modified after December 31, 2018, and expressly provided that the TCJA provision concerning spousal support applies.
Therefore, effective January 1, 2019, spousal support paid by the payor is no longer deductible by the payor or included as taxable income to the payee for all new orders or agreements entered into after that date. These new rules apply to both temporary support paid during the course of the case in litigation, and to support payments ordered or agreed upon as a final resolution of the case.
This change in federal law has a tremendous impact in Virginia spousal support cases.
Example. Take for example a spousal support award of 12,000 per month from Husband who is in the 35% income tax bracket, to Wife who is in the 25% bracket. Under the “old rules” for the tax treatment of alimony, that 12,000 per month in spousal support would have been taxable income to Wife and tax-deductible by Husband. Wife would pay 1500 per month in income tax on that spousal support (12,000 x .25), while Husband would “save” 1700 per month in deductions (12,000 x .35). So what would that 12,000 per month really amount to for each party? The answer is: 11,500 after taxes to Wife (12,000 – 1500 income tax) vs. 11,300 after taxes from Husband (12,000 – 1700 deduction). Given the parties’ different tax brackets, under the old rules it would essentially cost Husband 11,300 per month to give Wife 11,500 per month.
Under the “new rules,” the 12,000 is not deductible by Husband and not taxable income to Wife. It costs Husband the full 12,000 per month (no deduction) to give Wife 12,o00 per month (not taxable income to her).
As shown in this example, an award of a given amount of spousal support might result in dramatically different amounts of money after taxes under the old rules vs. the new rules.
Pendente Lite Spousal Support
Virginia Code § 20-103 provides that in any case where spousal support is in dispute, a Virginia court may enter an order of temporary support pending the conclusion of the case. § 20-103 applies in divorce, annulment, and separate maintenance cases in circuit court, as well as spousal support proceedings brought in juvenile and domestic relations district court (“JDR court”). Such a “pendente lite” order of support will last until the conclusion of the case, at which time the court may order more or less support, or no support at all, depending upon the facts of the case.
Virginia Code § 16.1-278.17:1 provides guidelines for determining the “presumptive” amount of pendente lite spousal support in JDR court cases in Virginia. The guidelines only apply to cases where the parties’ combined monthly gross income does not exceed $10,000. A Virginia JDR court must order the amount of pendente lite spousal support stated in the formula, unless it finds “good cause” to “deviate” from the presumptive amount. The formula stated in § 16.1-278.17:1 is: (a) 30% of the gross income of the payor less 50% of the gross income of the payee in cases with no minor children and (b) 28% of the gross income of the payor less 58% of the gross income of the payee in cases where the parties have minor children in common.
§ 16.1-278.17:1 only technically applies to JDR court cases. However, effective July 1, 2020, Virginia Code § 20-103 was amended to specifically incorporate the same pendente lite spousal support guidelines in circuit court cases as in JDR court cases in Virginia.
Under these pendente lite spousal support guidelines, where there is both child and spousal support payable between the parties, the spousal support is calculated first, then the parties’ incomes are adjusted by the spousal support and the resulting incomes are used to calculate any pendente lite child support in accordance with the child support guidelines.
The pendente lite spousal support guidelines do not take taxes into account, nor do they take into account the parties’ actual needs going forward. They were designed only to provide a temporary spousal support amount, until the court could hold a final hearing and make a more considered spousal support evaluation.
Remember that the pendente lite guidelines do not apply to cases where the combined monthly gross income of the parties exceeds $10,000. In those cases, the court must look to the factors found in Virginia Code § 20-107.1 in determining any pendente lite spousal support amount.
New Pendente Lite Guidelines Effective July 1, 2020
As stated in the Tax Consequences of Spousal Support section above, the The Tax Cuts and Job Act (TCJA) of 2017 changed federal law to eliminate the deductibility of spousal support. This means that new spousal support awards after January 1, 2019 are non-deductible by the payor and non-taxable to the payee. Virginia courts were left to grapple with the proper manner in which to respond to this enormous change in the law.
In response to this change brought about by the TCJA, the Virginia legislature revised the pendente lite spousal support guidelines, effective July 1, 2020. Effective July 1, 2020, the pendente lite spousal support guidelines in Virginia are:
- Cases With Minor Children: 26% x Payor’s Income – 58% x Payee’s Income
- Cases With No Minor Children: 27% x Payor’s Income – 50% x Payee’s Income
Prior to July 1, 2020, the pendente lite spousal support guidelines were:
- Cases With Minor Children: 28% x Payor’s Income – 58% x Payee’s Income
- Cases With No Minor Children: 30% x Payor’s Income – 50% x Payee’s IncomeP
Because spousal support payments are no longer taxable income to the payee or tax-deductible by the payor, the new guidelines provide for lower presumptive amounts of pendente lite spousal support.
Note: the revised pendente lite guidelines by themselves do not constitute a material change in circumstances for purposes of modifying an existing spousal support order.
The revised pendente lite guidelines apply to all support cases in juvenile court, all divorce actions in circuit court, and all separate maintenance claims in circuit court that begin after July 1, 2020.
Virginia law allows a married person who is separated from their spouse to file a petition for “separate maintenance.” Separate maintenance is distinct from spousal support, and may be an attractive option to individuals who require support from their spouse but who do not want or cannot yet file for a divorce. For more information, see Separate Maintenance in Virginia.
Modification of Spousal Support
In Virginia, a spousal support obligation is not modifiable if:
- It is pursuant to an agreement (as opposed to ordered by a judge) that was entered into prior to July 1, 2018, and the agreement does not state that spousal support is modifiable; or
- It is pursuant to an agreement that was entered into after July 1, 2018, and the agreement specifically states that spousal support is not modifiable.
In all cases that do not fall into either of those two categories, spousal support is modifiable.
For spousal support to be modifiable, there needs to have been a material change in circumstances since the date of the court order establishing the initial obligation. But not all such changes in circumstances justify a modification of support. In general, the change must be involuntary. For example, a support payor cannot quit his or her job and expect to have support reduced. The same is probably true if the payor is fired for cause.
For more information on the modification of spousal support, see:
- Spousal Support Reduction Based on a Drop in Payor’s Income
- Modification of Support Obligation Based on COVID-19 Layoff in Virginia
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