An old friend of mine surprised me the other day. She told me that she thought that if you divorce and you do not have minor children, you are not entitled to maintenance, formerly known as “alimony” in Illinois. This is not true! I’m speaking only about Illinois law here.
In Illinois, the question of whether someone receives maintenance (sometimes also called “spousal support”) is only dependent upon the respective incomes of the two soon-to-be-ex spouses. My friend is a smart and well-informed person, so I thought if she had misconceptions about the maintenance laws, certainly other people did as well.
For a few years now, there has been a formula in the divorce statute for maintenance in Illinois, although the parties and the judges may deviate from the “guideline” calculation results. The formula is 33.33% of the higher-earning spouse’s NET income (after taxes), minus 25% of the lower-earning spouse’s net income. The resulting number, however, is subject to a 40% cap: the person receiving maintenance cannot receive more than 40% of the total income. So between what the receiving spouse earns on his or her own, plus what he or she receives in maintenance, he or cannot receive more than 40% of the total income.
Visual Example:
Spouse A gross income: $150,000
Spouse B gross income: $20,000
Gross to net calculations:
150,000 – 29% taxes = 104,652 NET income.
20,000 – 15% taxes = 16,860 NET income.
33.33% of Spouse A net income = 34,881
25% of Spouse B net income = 4,215
34,881 – 4,215 = 30,666 tentative maintenance.
40% Cap test. Is 16,860 + 30,666 (= 47,526) less than 40% of the combined net income 48,604 (121,512 x .4)? Yes.
So all of the $30,666 is the “guideline” calculation for maintenance to Spouse B.
Just so you know, all family law attorneys subscribe to software programs to help us calculate these numbers. And, as you can imagine, many different “support scenarios” are sometimes run – and litigated in court for those folks unfortunate enough to be involved in a high conflict divorce.
As you can also imagine, these calculations are straight forward when both spouses are W-2 employees. When either of them is self-employed, it becomes more complicated because “net income” can be an area of disagreement. Income for IRS purposes is not the same as income for maintenance calculations. There are expenses that self-employed people routinely deduct on their taxes which get “added back” to income for support calculations. Common examples are depreciation of assets, car expenses, phone expenses, health care costs. Basically things that W-2 employees can’t
deduct.
Comments