Other Mandatory Obligations
Since the purpose of this program is to calculate the net disposable income that each party will have after payment of alimony and child support, as well as taxes and FICA, Other Mandatory Obligations gives you an opportunity to enter other obligations for the parties, such as mandatory payroll deductions (e.g., union dues, etc.) or other obligations, such as maintenance of life insurance or health insurance for the other spouse. This is a kind of catch-all category for you.
Enter in the Alimony box the gross monthly amount of alimony that the payor
Check either the Husband or the Wife in the Who Pays? box below.
If you want to make the alimony nontaxable/nondeductible, check the
This gets to the heart and guts of the program.
Net Alimony Cost/Benefit: The Net Alimony Cost shows the net monthly cost of the alimony to the payor after the tax savings and child support savings are subtracted from the gross alimony amount. In other words, if the payor Husband pays $1000 a month in gross alimony, but saves $250 a month in taxes because he can deduct the alimony and his child support obligation under the Guidelines drops by $150, the net monthly cost to him will be shown as $600 in the Net Alimony Cost amount. In other words, that shows how much the proposed alimony will change his monthly Disposable Income, as opposed to no alimony being awarded.
Similarly, the Net Alimony Benefit shows the net amount of monthly alimony that the recipient will receive each month after the tax costs and child support reduction are subtracted from the gross alimony amount. For example, if the recipient Wife has to pay $150 in taxes a month out of the $1,000 alimony that she is receiving and she will receive $150 less in child support, she is netting out only $700 a month, and that amount is shown as the Net Alimony Benefit.
In other words, an award of alimony will generally affect a party's monthly disposable or spendable income in two ways: (1) tax savings or costs, and (2) the resulting decrease in child support because of the income shift caused by the alimony. The Net Alimony Cost or Benefit subtracts both from the gross alimony to get the net figure.