Unallocated Support Law and Legal Definition
Unallocated support, in the context of family law, refers to a total amount for maintenance and child support, that doesn't specify a specific amount for either. Unallocated support is a technique sometimes used in domestic relations cases to encourage sensible cash-flow planning between separated spouses. If used correctly, the technique enables the parties to achieve a higher net transfer of funds to the payee spouse because the payor spouse, who is generally in a higher tax bracket, reaps an economic benefit from the larger tax deduction obtained when allocated family support payments are structured to be deductible as alimony. The tax code prohibits an amount being fixed as child support being treated as alimony, therefore, the unallocated sum for both spousal support and child support may all allowable as taxable/deductible alimony because it does not “fix” an amount for child support.
