A Quick History Lesson
In recent years, Illinois has made various changes to the maintenance (spousal support) section of Illinois Marriage and Dissolution of Marriage Act— 750 ILCS 5/504. Before 2015, judges had wide discretion when tasked with determining a payor-spouse’s support obligation in terms of amount and duration. Unlike Illinois’ child support statute, the Court had no formula to apply; rather, it examined a laundry list of equitable factors on a case by case basis. These factors included, but were not limited to, the needs of each spouse, length of the marriage, income and earning capacity of each spouse, standard of living established during the marriage, etc.
Effective July 1, 2015, the legislature developed a two-pronged approach to determining maintenance which limited judges’ latitude and strived to create more uniformity on this issue. First, the Court had to determine whether the movant-party was indeed a maintenance candidate; if the answer was “yes,” then the Court could apply a statutory formula. NOTE: If the divorcing couple’s annual combined income exceed $250,000, the guidelines would not apply which invited the court to defer to its application the Section 504 factors and historical methods of calculation.
2015 Formula for Determining Maintenance Amount
Calculate 30% of the payor-spouse’s gross income – 20% of the recipient-spouse’s gross income. If that amount exceeds 40% of the combined gross income of both parties, then then recipient-spouse’s maintenance award would be capped at the 40% amount ensure support payments wouldn’t result in a windfall to the recipient.
2015 Formula for Determining Maintenance Duration
Take the length of the parties’ marriage (i.e., the date of marriage through date of divorce case filing) as follows:
- 0-5 years of marriage x 20%
- 5-10 years of marriage x 40%
- 10-15 years of marriage x 60%
- 15-20 years of marriage x 80%
- 20 or more years of marriage: the Court had discretion to award the recipient spouse permanent maintenance or a duration equal to the length of the parties’ marriage.
Critical January 1, 2018 Amendments to Illinois’ Maintenance Statute:
The duration calculation changed (which could result in a shorter payment period) and the threshold of a couple’s combined gross income increased from $250,000 to $500,000. The take away effects? Now higher-income families also fell under the statute’s purview. For long-term marriages, recipient-spouses could receive a larger support amount. Duration wise, the payor-spouse is no exposed to the ominous obligation of paying maintenance “permanently.”
NOTE: If a party got divorced prior to January 1, 2019 and then seeks to modify the support provision of his/her judgment after January 1, 2019, maintenance will likely remain tax-deductible.
The 2018 Formula for Determining Maintenance Duration created a more gradual
step-up approach—an annual increase rather than a five-year period:
- 0-5 years of marriage x 20% (stayed the same as 2015 amendment)
- 5 years (0.24)
- 6 years (0.28)
- 7 years (0.32)
- 8 years (0.36)
- 9 years (0.4)
- 10 years (0.44)
- 11 years (0.48)
- 12 years (0.52)
- 13 years (0.56)
- 14 years (0.60)
- 15 years (0.64)
- 16 years (0.68)
- 17 years (0.72)
- 18 years (0.76)
- 19 years (0.80)
- 20 or more years of marriage: Payment period will equal the duration of the marriage or be set as “indefinite” maintenance rather than permanent maintenance. In other words, the court has more discretion in determining maintenance for long term marriages and the payor-spouse is less likely to make support payments in perpetuity.
2018 Federal Tax Law’s Impact on Illinois Maintenance Statute:
Prior to the enactment of the federal Tax Cuts and Jobs Act (“TCJA” or “tax reform bill”), the payor-spouse could deduct her maintenance payments from her taxable income and the recipient-spouse would have to pay taxes on his support award. This permitted divorcing couples to structure their settlement agreements/the Court to determine support awards in a way that reduced the tax burden on both parties and spread the family’s income further.
For divorce judgments entered after December 31, 2018 (by agreement of the parties or after trial ruling by the judge), income tax implications have been eliminated from the equation for both spouses. For example, if the payor-spouse no longer gets a tax break, her expendable income will decrease. This means that there will be a decrease of available funds to divide among the family. This is especially true for individuals in higher tax brackets.
Enter Public Act 100-923 (enacted on August 17, 2018):
Effective January 1, 2019, the statutory formula will change once more. It appears that the latest amendment serves to recoup some of the liquid income to be allocated amongst a divorcing family. The court must consider tax consequences of each spouse rather than the “tax consequences of the property division upon the respective economic circumstances of the parties.”
Public Act 100-923 provides that the amount of maintenance shall be calculated by taking 33 and one 1/3 percent (33.3%) of the payor’s net income minus 20 percent of the payee’s net income. The cap for the couple’s combined net income remains at 40 percent.
Also, the Illinois legislature is considering creating a ceiling for the combined amount of maintenance and child support to be paid by the high wage-earning spouse. It is expected that the cap would be set at 50% of the payor-spouse’s net income. Additionally, the unallocated maintenance provision has been deleted.
As Illinois’ laws on spousal support continue to evolve, it is critical that you consult an experienced family law attorney if you are considering divorce or if your divorce process is already underway. Our diverse team of seasoned attorneys at Beermann LLP will guide you through the process and provide you with unparalleled legal service and support.
Lindsay J. Margolis, Divorce and Family Law Attorney