How to Calculate Alimony in New York

Calculating alimony is different in every state and for every family. It may be overwhelming and a bit confusing but don’t worry, we’re going to break it down for you.

What is Maintenance?

In New York, Alimony or spousal support is referred to as maintenance. Maintenance is a payment from one spouse to the other, both during (pendent lite), and after the couple is divorced.  Maintenance is deemed appropriate when there is a significant disparity in income between the two spouses filing for divorce. The purpose of this is to assist the spouse that has a lower income in becoming financially independent.

New York Guidelines

New York law provides guidelines outlining how much maintenance should be paid and for how long it should be paid for. New York courts are obligated to apply the maintenance guidelines unless the result of the calculation is “unjust or inappropriate.” What determines if the calculation is unjust is based on a number of factors such as age, health, future earning capacity, and the standard of living of the parties during the marriage.

The law contains two formulas: One for couples with children and one for couples without children. These formulas are constructed to calculate the amount of maintenance that should be paid, and an advisory schedule for determining how long the maintenance should be paid for. Those with children will have an added component to their maintenance in the form of child support.

Determining Your Income

The first step in calculating maintenance is determining your income. In the simplest cases, income is what you report on your most recent federal tax return. This includes income from employment, business income, and self-employment.

In more complicated cases, the law will allow you to add or subtract a specific amount of your income when determining your income. This is only permitted if the circumstances require it, such as a spouse being underemployed, or if a spouse is receiving other personal benefits from employment such as the use of a car.

Once you have determined your income, FICA (social security and Medicare taxes) and some local taxes (for example, in New York City or Yonkers), are deducted in order to arrive at a net income for calculation purposes. It should be noted that according to the law, the maintenance formula only applies to a payor spouse’s income of up to $184,000.  Beyond that income, the application of the maintenance calculations is discretionary, and the court can award additional maintenance based on a number of other factors.

How to Calculate Maintenance & Examples

If there are no children, we would perform two calculations. First, Calculation #1: Take 30% of the higher spouse’s income and subtract 20% of the lower spouse’s income.

For the purpose of an example, let’s make things easy and assume that we have a couple in which the Husband earns $100,000 net per year and the Wife earns $50,000 net per year.

To calculate using this formula: you would take 30% of $100,000, which is equal to $30,000. Then, you would take 20% of $50,000 which is equal to $10,000. Using the results, you would subtract the lower spouse’s income from the higher spouse’s income. $30,000-$10,000 =$20,000.

Then we would set that number aside for a minute and do Calculation #2: Take 40% of the spouses combined income and subtract the lower income.  In our example, the result would be $60,000 – $50,000 or $10,000.

Then, we would take whichever number is lower between the results of Calculations #1 and #2 and this would be our presumptive maintenance payment.  So in our example, the Husband would pay his Wife $10,000 per year in maintenance or $833 per month.

How to Calculate Maintenance with Children

Putting aside duration for a moment, let’s use the same example to calculate maintenance for the same couple earning $150,000 combined income per year except this time with children.

Again, we would perform two calculations. First, Calculation #1: Take 20% of the higher spouse’s income and subtract 25% of the lower spouse’s income. In our example, the result would be $20,000 – $12,500 or $7,500.

Then we would set that number aside for a minute and do Calculation #2: Take 40% of the spouses combined income and subtract the lower income.  In our example, the result would be $60,000 – $50,000 or $10,000.

Then, we would take whichever number is lower between the results of Calculations #1 and #2 and this would be our presumptive maintenance payment.  So, in our example when the couple has children, the Husband would pay Wife $7,500 per year in maintenance or $625 per month.

Then, in order to calculate child support, maintenance would be added to the net income of the payee and subtracted from the net income of the payor. For more information, visit the Child Support Standards Chart.

As a general rule, the mathematical formula results in a maintenance award to the lower income spouse only in cases where the lower income spouse’s income is less than 2/3 of the higher income spouse’s income. So, if the lower income spouse in our example earned $66,667 per year instead of $50,000 per year, the formula would result in no maintenance.

How to Calculate Maintenance Duration

Now let’s get to duration. The law provides advisory guidelines as to how long maintenance should be paid based on how long the couple has been married

0-15 Years

In the case of a marriage of 0 to 15 years, the advisory range is 15% to 30% of the length of the marriage. For example, if a couple is married for 5 years, the advisory range would be 9 months to 1.5 years of maintenance.

15-20 Years

In the case of a marriage of 15 to 20 years, the advisory range is 30% to 40% of the length of the marriage. So, if a couple is married for 17 years, the advisory range would be 5.1 to 6.8 years of maintenance.

Over 20 Years

In the case of a marriage of over 20 years, the advisory range is 35% to 50% of the marriage. So, if a couple is married for 30 years, the advisory range would be 10.5 to 15 years of maintenance.

Additional Notes About Maintenance

As of January 1, 2019, under the new federal tax laws, maintenance is no longer tax deductible to the payor spouse and is not declarable as taxable income of the recipient spouse. Orders and agreements that were in effect as of December 31, 2018, are still governed by the old tax law, but all new orders and agreements in 2019 now fall under the new tax law. In addition, maintenance will terminate upon the death of either party or the receiving spouse’s remarriage.

As you have probably noticed by now, maintenance guidelines in New York are purely mathematical and do not take into account the individual circumstance of each family.

This often results in maintenance awards that make little financial sense in reality. Fortunately, the law allows couples to opt out of using the maintenance guidelines calculations in private agreements, and such agreements do not need to be approved by the courts. In mediation, a couple is entirely free to make their own decisions regarding maintenance. The couple can determine if maintenance is appropriate in their situation and if so, customize the amount and duration so that it works for their own unique family needs and circumstances.

 

 

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