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How the New Illinois Spousal Maintenance Law Will Affect Divorcing Couples

By Ann Fischer

Couples who are planning to divorce, as well as those who are currently in divorce proceedings, should be aware of a change in the Illinois Spousal Maintenance Law, section 504 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA). Specifically, the change in law affects the formula used by the court to calculate spousal maintenance as well as the tax consequences of paying maintenance and receiving maintenance.

Maintenance payments may be granted by the court during a proceeding for the dissolution of marriage, legal separation, declaration of invalidity of marriage, or dissolution of a civil union. Maintenance (formerly known as spousal support or alimony) payments to one of the spouses may be considered appropriate by the court depending on many factors, i.e., the assets of each party as well as their individual circumstances and needs (age, health, employability and income, etc.) and specifics of the marriage (duration, parental responsibility, liabilities, etc.).

If spousal maintenance is found to be appropriate, the amount and duration is calculated using a specific formula.

ILLINOIS SPOUSAL MAINTENANCE LAW PRIOR TO JANUARY 1, 2019

If maintenance was calculated for a couple based on a combined annual income over $250K, the following formula was used:

30% of the income from the gross annual income of the payor (spouse who earns more)

MINUS 20% of the annual income of the payee (spouse who earns less)

= Annual Maintenance Payment

The duration of the payments was calculated based on the length of the marriage (number of years) multiplied by a statutory factor to determine the length of payments.

The statutory factors were:

.20 for less than 5 years of marriage

.40 for 5 years or more but less than 10 years of marriage

.60 for 10 years or more but less than 15 years of marriage

.80 for 15 years or more but less than 20 years

For example, a couple married for 10 years would have a spousal maintenance agreement for six years.

Beyond 20 years, the court could order maintenance for a period equal to the length of the marriage or permanently.

Prior to January 1, 2019, maintenance payments were able to be deducted from the payor’s taxable income and included in the payee’s taxable income.

CURRENT ILLINOIS SPOUSAL MAINTENANCE LAW IN EFFECT AS OF JANUARY 1, 2019

 In addition to other changes, one of the modifications that will have the greatest impact on individuals with divorce judgments entered post January 1, 2019 is the change with the formula for calculating maintenance. The formula is based on the payor and payee’s net income, rather than their gross income and the new formula is:

33.3% of the payor’s net income minus 25% of the payee’s net income

 = Annual Maintenance Payment

The duration of the payment is still calculated based upon the years of marriage multiplied by the “statutory factor.”  However, the statutory factor has become more specific, in many cases, lowering it to affect the overall calculation.

.20 for less than 5 years of marriage

.24 for 5 years or more but less than 6 years of marriage

.28 for 6 years or more but less than 7 years of marriage

.32 for 7 years or more but less than 8 years of marriage

.36 for 8 years or more but less than 9 years of marriage

.40 for 9 years or more but less than 10 years of marriage

.44 for 10 years or more but less than 11 years of marriage

.48 for11 years or more but less than 12years of marriage

.52 for 12 years or more but less than 13 years of marriage

.56 for 13 years or more but less than 14 years of marriage

.60 for 14 years or more but less than 15 years of marriage

.64 for 15 years or more but less than 16 years of marriage

.68 for 16 years or more but less than 17 years of marriage

.72 for 17 years or more but less than 18 years of marriage

.76 for 18 years or more but less than 19 years of marriage

.80 for 19 years or more but less than 20 years of marriage

Maintenance payments are now non-deductible from the payor’s taxable income and also are not included in the payee’s taxable income. The new Illinois Spousal Maintenance Law may favor either the payor or the payee depending on their specific circumstances.

At Gardi, Haught, Fischer & Bhosale LTD we are experienced with all types of Illinois divorce proceedings and negotiating settlements with regard to the Illinois Spousal Maintenance Law. If you are facing a divorce situation and have questions about spousal maintenance and your rights, contact the experienced divorce attorneys at Gardi, Haught, Fischer & Bhosale LTD to by requesting a free case evaluation below to learn about your options.

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