Big changes are coming to the Illinois spousal maintenance law (spousal support) specifically Section 504 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA). This section deals with maintenance, which was formally referred to as “spousal support” or “alimony.” The changes are set to take effect on January 1, 2019. This is big news for anyone currently involved in divorce proceedings and parties who are contemplating filing for dissolution in the near future. If maintenance is a factor in your divorce you will want to speak to an attorney regarding the below-mentioned changes, as there will be a difference between Judgments for Dissolution of Marriage entered before and after January 1, 2019.
First, is Spousal Maintenance Appropriate?
Before discussing the details of maintenance (duration and amount) the court must still make a finding that maintenance is appropriate given the specific facts of the case. This is nothing new. There is a threshold question that must be answered prior to figuring out any details of a maintenance award- is an award for maintenance appropriate? If the answer is no, then the court must bar the party seeking maintenance from an award of maintenance. This is a yes or no. You are either entitled to maintenance or you are not. The new statute even states that if an award for maintenance is not appropriate, the court must bar the request, regardless of the length of the marriage. Length of marriage is a big factor in any divorce but the new change to this statute reiterates that this is only one of many relevant factors that must be considered when deciding if an award is appropriate in the first place.
Spousal Maintenance Duration and Amount
If the court determines that an award for maintenance is appropriate after considering all relevant factors, then you move forward to figure out duration and amount. To do so you must determine if guideline maintenance duration and amounts are appropriate.
Guideline Maintenance vs. Non-Guideline Maintenance
Guideline maintenance is awarded unless the court makes a finding that doing so would be inappropriate. Generally speaking, guideline maintenance is awarded if the parties’ combined gross annual income is less than $500,000.00 and if the payor of the maintenance is not obligated to pay maintenance or child support in any other court case from a past relationship.
As of January 1, 2019, maintenance will be calculated by taking 33 1/3 % of the payor’s NET annual income minus 25% of the payee’s NET annual income. This is a major change due to recent changes in the Internal Revenue Service (IRS) Code. Previously, guideline maintenance was calculated by taking 30% of the payor’s GROSS annual income minus 20% of the payee’s GROSS annual income.
The court will order maintenance for a duration that corresponds with the percentages that can be found in Section 504 of the IMDMA. Length of marriage is from date of marriage to date that a petition for dissolution of marriage is filed. Here’s how it breaks down based on duration:
Marriages – Duration Percentages for Spousal Maintenance
- less than 5 years (.20);
- 5 years or more but less than 6 years (.24);
- 6 years or more but less than 7 years (.28);
- 7 years or more but less than 8 years (.32);
- 8 years or more but less than 9 years (.36);
- 9 years or more but less than 10 years (.40);
- 10 years or more but less than 11 years (.44);
- 11 years or more but less than 12 years (.48);
- 12 years or more but less than 13 years (.52);
- 13 years or more but less than 14 years (.56);
- 14 years or more but less than 15 years (.60);
- 15 years or more but less than 16 years (.64);
- 16 years or more but less than 17 years (.68);
- 17 years or more but less than 18 years (.72);
- 18 years or more but less than 19 years (.76);
- 19 years or more but less than 20 years (.80).
- 20 or more years: the court, in its discretion, shall order maintenance for a period equal to the length of the marriage or for an indefinite term.
If the court deviates from the guidelines the court must state why. The court shall state whether the maintenance is fixed-term, indefinite, reviewable, or reserved by the court.
If fixed-term maintenance is granted then the maintenance terminates at the end of the period during which maintenance is to be paid. Maintenance is then barred after the said period ends.
Indefinite maintenance does not have an end date and it continues until modification or later termination.
If reviewable maintenance is granted, the court must state the period of the specific term of maintenance and state that it is reviewable.
Upon review, the court will determine if the maintenance should continue for further review, extend for a fixed non-modifiable term, extend indefinitely, or permanently terminate. This maintenance could also be modified or terminated pursuant to Section 510 depending on the facts of the case.
The updated statue still makes sure that the payee is not receiving more than 40% of the parties’ combined net annual income, after adding the maintenance award to their individual annual income.
Additional language has been added to the statute to make sure that, in the event, that a payor’s guideline- based maintenance and child support obligation exceed 50% of their net income, the court may then determine non-guideline maintenance and/or non-guideline child support.
Modifications to Maintenance Orders Entered Prior to January 1, 2019
If you have an order for maintenance that was entered before January 1, 2019, and you file a petition to modify after the new law takes effect, then you should be able to continue including the maintenance payments in the payee’s gross income from federal income tax purposes. But, of course, this is dependent on the language in your marital settlement agreement or judgment for dissolution of marriage. If you no longer want the payments included in the payee’s gross income for federal tax purposes then you must expressly state so in the spousal maintenance modification order.
Biggest Takeaway from the Illinois 2019 Maintenance Law
The calculation method for maintenance beginning January 1, 2019, has been changed due to recent changes in the IRS code. The maintenance payor will not be able to deduct the maintenance payments from their gross income for federal income tax purposes if their Judgment for Dissolution of Marriage (including an award for maintenance) is entered on or after this important date. Previously, the party receiving maintenance (payee) would include the maintenance payment in their gross income for federal income tax purposes, thereby reducing the payor gross income for tax purposes.
If you have questions or concerns about spousal maintenance or another divorce-related issue contact Nichol Broshous or email Anderson & Boback to schedule your confidential consultation with our Chicago divorce attorneys to learn more about spousal maintenance law.