During a divorce, the most common stressor that runs through people’s minds is money. Will there be enough to keep the house? The car? Health Insurance? Is there enough to support two households? Who pays which bills? The issue of money is a very emotional one and it causes many disagreements and can be very challenging to resolve.
Maintenance, formerly referred to as Alimony in New York, is a payment made from one spouse to the other over a pre-determined period of time. Maintenance is not a guarantee as there are many factors the Court considers in making a determination to pay or not pay, both while the action is pending, and after its resolution.
New York State Alimony Laws
New York State has spousal support laws in effect to provide financial security for those affected by a divorce. Alimony, or spousal support, is intended to help both spouses maintain their accustomed standard of living following a divorce. In order to assess spousal support needs and determine whether alimony is appropriate, key issues such as each party’s income and earning capacity, the length of the marriage, economic resources/assets available to each spouse, and much more are taken into consideration. Spouses that are already financially independent may or may not receive spousal support — it depends on subjective factors and any proof the lower-earning spouse can present of their need for additional financial aid. As spousal support is always subject to change upon a reevaluation of circumstances or events, it’s important to consider seeking advice from an experienced attorney and/or advisor if you find yourself dealing with spousal support in New York State.
How is Maintenance Calculated?
Calculating maintenance in New York is not a simple task. Some factors that make determining an amount difficult include:
- The Tax Reform Act of 2017 which was passed into legislation on 12/22/2017, eliminated the deduction of maintenance payments as taxable income on Federal returns effective January 1, 2019, it further stated any agreements executed on or before December 31, 2018, would remain taxable at the federal level. That led to a massive scramble to get agreements signed prior to December 31, 2018, to reap the benefits of taxable maintenance. Being able to deduct maintenance from Federal taxes was previously a factor used in determining maintenance and is now a factor used in reducing the amount for maintenance based on the inability to claim the same.
- However, despite the passing of the Tax Reform Act of 2017, New York still allows for the deduction of maintenance payments for payors and requires recipients to report payments as taxable income on their State tax returns.
Determining spousal maintenance requires artful negotiation, despite the implementation of the maintenance statute.
New York Maintenance Calculator
The statute for maintenance in New York was originally enacted in October 2010 and was most recently modified in March 2022. There are two different ways to calculate maintenance in New York, which creates disagreements from the very start. Each formula set forth below has three steps.
Method One – With Children
- 20% of Payor’s Income – 25% of Payee’s Income = $________
- 40% of combined income = $_______
- The maintenance awarded is the lesser of the two figures.
Method Two – No Children
- 30% of Payor’s Income – 20% of Payee’s Income = $________
- 40% of combined income = $________
- The maintenance awarded is the lesser of the two figures.
New York law also imposes an income cap, the Maintenance Guidelines Act has raised the income cap to $203,000 as of March 1, 2022. The income cap changes every two (2) years in accordance with the Consumer Price Index. An income cap means that if the payor or the combined net income is more than $203,000, the maintenance calculation will be based on all income up to the cap of $203,000. A person receiving support will likely find this to be unfair, especially in the higher income brackets, which leads to many disagreements and additional negotiations. There are fifteen (15) enumerated factors the court may use to deviate and consider income over the cap.
How Long Is Spousal Support in NY?
Spousal support (also known as alimony) in New York is decided on a case-by-case basis and depends upon the individual circumstances of each marriage, such as the length of the marriage and the respective incomes of each spouse. Depending on these factors, spousal support orders in New York may be temporary or permanent. Short-term spousal support could last months or years while permanent spousal support lasts until either one of the spouses dies, or until it is otherwise modified by court order. With this said, spousal support is generally only available for a limited duration as it is largely designed to assist a former spouse in becoming self-supporting after a marriage has ended.
For divorcing spouses in NY, the length of the marriage will determine how long they may be eligible for post-divorce spousal maintenance. Contributions can range from a few months to many years based on marital longevity.
- Marriages lasting 0-15 years incur spousal support for 15%-30% of the length of the marriage.
- Marriages lasting 15-20 years incur spousal support for 30%-40% of the length of the marriage.
- Marriages lasting 20+ years incur spousal support for 35%-50% of the length of the marriage.
Proceed With Caution
Domestic Relations Law §240 defines what is counted as income when calculating maintenance and child support. Income-producing assets such as mutual funds, rental property, and stocks count as income and are part of the maintenance calculation.
In addition, New York allows divorcing couples to deviate from the amount of maintenance provided the two spouses can agree on an alternate amount. Yes, even after calculations and income caps you can choose to bypass the result and come up with your own amount which is best suited for your family and prior standard of living.
This negotiation is most successful when done through attorneys, or the mediation process as money is always a hot topic between divorcing spouses.
This negotiation is most successful when done through divorce mediation.
Divorce Mediation or Litigation
At McCabe, Coleman, Ventosa, and Patterson, we aim to achieve a mutual and fair agreement by guiding individuals to reach a consensus. Dan McCabe has extensive financial knowledge surrounding maintenance and can help you determine an appropriate amount and duration. They will explore the facts specific to your case and assist you in determining what is best for you, your spouse, and your children.