The Illinois Spousal Maintenance Laws recently changed as of January 1, 2019, in response to the changes related to alimony and spousal support contained in the Tax Cuts and Jobs Act (TCJA). Below are a few of the significant changes to spousal maintenance in Illinois. We strongly suggest consulting an Illinois divorce attorney to discuss all the changes to the laws related to spousal maintenance in detail.
Spousal Maintenance is Not Longer Tax Deductible for the Payor Spouse
The new federal tax changes deleted the tax deduction for spousal maintenance. A payor spouse is no longer permitted to claim a deduction for spousal maintenance, and the payments are not considered gross income for the receiving spouse.
Therefore, considering this change, Illinois made several changes to its spousal maintenance laws.
- The court shall bar spousal maintenance, regardless of the length of the marriage if the court finds that an award of spousal maintenance is not warranted in the case.
- The court may order the calculation of maintenance payments, child support payments, or both payments through non-guideline calculations if applying the guideline maintenance calculation results in combined child support and maintenance payments that exceed one-half of the pair spouse’s net income.
- The court must state if spousal support will be reviewable, indefinite, fixed-term, or reserved by the court. With reviewable maintenance, the court may grant spousal maintenance for a specific term and then review it at the end of the term. Indefinite maintenance has no termination date while fixed-term spousal maintenance has a specific termination date, at which time further maintenance is barred.
- Net annual income is the basis for calculations of awards of guideline spousal maintenance for couples with a gross annual income of less than $500,000. When a payor does not have any support obligations for a previous spouse or child from a previous relationship, subtract 25% from the payor’s net income. Spousal support is then 33 1/3 percent of that figure. However, the amount when added to the net income of the payee cannot result in the payee receiving less than 40% of the parties’ combined net incomes.
- There is a different formula for the calculation for modification of spousal maintenance orders entered before January 1, 2019, that is still subject to the previous tax laws regarding tax deductions and inclusion in taxable income. Calculate the new spousal maintenance amount by multiplying the payor’s gross income by 30% and then subtracting 20% of the recipient’s gross income from that figure. The same 40% rule applies as it does with the new method, except the basis is the combined gross income of the parties. The parties can agree to adopt the new tax law instead of remaining under the old law for tax purposes.
Contact an Illinois Divorce Attorney for More Information
The above summary only covers some of the most important changes in the spousal support laws in Illinois. If you are contemplating a divorce or a modification of spousal support payments, contact an experienced Illinois divorce attorney to ensure you do not overpay or receive less spousal support than allowed by law.