Summary of Indiana Alimony Law

Alimony (referred to as maintenance in Indiana) is the court-ordered financial support of one spouse by the other spouse as a part of a legal separation or a divorce. The laws of Indiana governing maintenance are generally contained in the Indiana Code at Title 31, Article 15, Ch. 7.

Courts may award maintenance in the following situations.

First, a court may award maintenance for a spouse during a period of mental or physical incapacity. In order to do so, a court must find a spouse to be physically or mentally incapacitated to the extent that the ability of the incapacitated spouse to support himself or herself is materially affected.

Second, a court may award maintenance in an amount and for a period of time that it considers appropriate if the court finds that:

• (A) a spouse lacks sufficient property, including marital property apportioned to the spouse, to provide for the spouse's needs; and
• (B) the spouse is the custodian of a child whose physical or mental incapacity requires the custodian to forgo employment;

• (A) the educational level of each spouse at the time of marriage and at the time the action is commenced;
• (B) whether an interruption in the education, training, or employment of a spouse who is seeking maintenance occurred during the marriage as a result of homemaking or child care responsibilities, or both;
• (C) the earning capacity of each spouse, including educational background, training, employment skills, work experience, and length of presence in or absence from the job market; and
• (D) the time and expense necessary to acquire sufficient education or training to enable the spouse who is seeking maintenance to find appropriate employment.

Modifying Maintenance Orders in Indiana

A court generally may increase or decrease the amount of money paid as alimony if either spouse requests it from a court and if that spouse shows changed circumstances so substantial and continuing as to make the terms of the maintenance unreasonable.

Alternatively, a court may modify the amount of alimony if a spouse shows that:

• (A) he or she has been ordered to pay an amount in child support that differs by more than twenty percent (20%) from the amount that would be ordered by applying the child support guidelines; and
• (B) the order requested to be modified or revoked was issued at least twelve (12) months before the petition requesting modification was filed.

Tax Consequences of Alimony

It is important to understand that there may be tax implications for individuals who pay or receive alimony. According to Section 71 of the Internal Revenue Code, alimony must be included in the recipient’s gross income and can be excluded from the payer’s gross income.

However, it is critical that payments actually qualify as alimony under the law. To qualify as alimony (also according to Section 71 of the Internal Revenue Code), payments must generally meet five conditions:

• (1) The payment is be a cash payment (such as a check or money order)
• (2) The payment is received by (or on behalf of) a spouse under a “divorce or separation instrument”
• (3) The divorce or separation instrument does not designate the payment as a payment which is not includible in gross cross income as alimony and not allowable as a deduction for the payee spouse (under Section 215 of the Internal Revenue Code).
• (4) The payer and payee are not members of the same household at the time payments are made
• (5) There is no liability to make payments after the death of the recipient spouse