Spousal Maintenance in New York

In January, 2016, significant changes to New York divorce law came into effect.  Now, New York law provides for a formula for determining maintenance payable after divorce. I'm going to tell you what the formula is but I need to warn you in advance that it's a little hard to follow and ultimately you'll use a calculator.  As part of our practice, we use Family Law Software to make maintenance and other financial calculations.  If you would like to run the calculations on your own, our colleague, Joy Rosenthal, has developed an excellent online calculator. 

For those of you interested in the nitty-gritty of how the formula works, here you go.

For purposes of calculating maintenance, each party's income is capped at $203,000 (this cap is to be recalculated based on the cost of living every two years and was most recently recalculated as of March 1, 2022), then we apply the formula. A court has discretion to apply the formula over and above the cap based on the fifteen factors listed below.

For these purposes, there are actually two formulas –

First Formula – is used where the party paying maintenance is also paying child support for children of the marriage, and the
Second Formula – is used where the party paying maintenance is NOT paying child support for children of the marriage. 

Here they are:  

1.  First Formula (if child support is being paid) is the LESSER of:
·       20% of the payor's income LESS 25% of the payee's income; or
·       (Payor's Income + Payee's income) X 40% - payee's income. 

2.  Second Formula (if child support is not being paid) is the LESSER of:
·       30% of the payor's income LESS 20% of the payee's income; or
·       (Payor's Income + Payee's income) X 40% - payee's income. 

Here is an example:  Let's assume the income of the husband is $200,000 per year and the wife’s income is $100,000, and there are two children who will live primarily with the wife. 

The husband will be paying maintenance AND alimony so the First Formula applies:

So, we take the LESSER of:

20% of the husband's income is $40,000 ($200,000 x 20%).  We take that $40,000 and subtract 25% of the wife's income, or $25,000 ($100,000 x 25%) for a difference of  $15,000; or

The husband’s Income PLUS the wife’s income or $300,000 ($200,000 + $100,000) TIMES 40% or $120,000 ($300,000 x 40%) and then we subtract the wife’s income of $100,000 from the result to arrive at $20,000 ($120,000 - $100,000).

Since $15,000 is less than $20,000, the maintenance is $15,000 per year to the wife. 

This is why we use a calculator.

Also, a court may deviate from the formula and may consider income in excess of the cap provided it explains why the deviation was necessary and sets forth its reasoning based on the following 15 statutory factors.

1.   The age and health of the parties;
2.   The present or future earning capacity of the parties, including  a history of limited participation in the workforce;
3.   The need of one party to incur education or training expenses;
4.   The termination of a child support award before the termination of the maintenance award when the calculation of maintenance was based upon child support being awarded which resulted in a maintenance award lower than it would have been had child support not been awarded;
5.   The wasteful dissipation of marital property, including transfers or encumbrances made in contemplation of a matrimonial action without fair consideration;
6.   The existence and duration of a pre-marital joint household or a pre-divorce separate household;
7.   Acts by one party against another that have inhibited or continue to inhibit a party's earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;
8.   The availability and cost of medical insurance for the parties;
9.   The care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws provided during the marriage that inhibits a party's earning capacity;
10.   The tax consequences to each party;
11.   The standard of living of the parties established during the marriage;
12.   The reduced or lost earning capacity of the payee as a result of having foregone or delayed education, training, employment or career opportunities during the marriage;
13.   The equitable distribution of marital property and the income or imputed income on the assets so distributed;
14.   The contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and
15.   Any other factor which the court shall expressly find to be just and proper. 

These factors can be useful as a framework for mediation if the parties want to deviate from the statutory cap or formula. 

The statute also provides "advisory" guidelines for the duration of maintenance.  

Length of Marriage: Advisory Duration
0-15 years: 15% to 30% of the length of the marriage
16-20 years: 30% to 40% of the length of the marriage
21 and more years: 35% to 50% of the length of the marriage

Scroll down to see a discussion of spousal maintenance and taxes. 

Spousal Maintenance in New Jersey

In New Jersey, alimony (sometimes referred to as spousal support or maintenance) is an award of money to one spouse to the other after a divorce. The basic principal of alimony is to ensure that the receiving spouse will be able to maintain a financial lifestyle which is reasonably comparable to the financial lifestyle enjoyed by the parties during the term of their marriage.

Before alimony is deemed appropriate, there are several factors that the Court examines: Is there an actual need for alimony, does one spouse have the ability to pay, and for how long were the parties married?

New Jersey recognizes four kinds of alimony: Open durational (previously permanent alimony), limited duration, reimbursement and rehabilitative alimony.

Open Durational Alimony (previously permanent alimony) is support which is generally payable until the death of either the payor or payee, the re-marriage of the payee-recipient, in some cases the cohabitation of the payee-recipient with an unrelated third party or a significant or substantial change in circumstances. The recent amendments to New Jersey’s alimony statute also creates a presumption that alimony payments will terminate upon the payor reaching retirement age, which at present is 67 years of age, though this can vary based upon a variety of circumstances. 

Limited Duration Alimony is a form of alimony that is awarded when economic assistance is needed for a limited period of time. For a Court to award limited duration alimony it must first make the determination that an award of open durational alimony is not appropriate based upon the circumstances. However, limited duration alimony is not awarded as a substitute for when permanent alimony is not appropriate. These awards are for a specified time-frame which may not be extended though the amount to be paid may be modified if there are changed circumstances during the period when payments are due.

Rehabilitative Alimony is a short-term award of support for a period of time to permit the recipient spouse to obtain a level of economic self-sufficiency. It would cease when the recipient/supported spouse is in a position of self-support. It represents an appropriate remedy for circumstances such as where a spouse relinquished or postponed his or her own career or education to support the household. In such instances, an award of rehabilitative alimony is intended to improve the earning capacity of the economically dependent spouse by meeting their needs such as obtaining additional education or training or the completion of their education.

Reimbursement Alimony is a rare type of support intended to compensate a spouse who made financial sacrifices during the marriage which resulted in a reduced standard of living and enabled the other spouse to forego gainful employment while completing or furthering their education, or obtaining a professional license with the mutual understanding that this would result in increased income and material benefits for the parties.

When deciding alimony claims our New Jersey statute requires the Court to consider, but not be limited by, the following factors:

1.    The actual need and ability of the parties to pay;
2.    The duration of the marriage or civil union;
3.    The age, physical and emotional health of the parties;
4.    The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, with neither party having a greater entitlement to that standard of living than the other;
5.    The earning capacities, educational levels, vocational skills, and employability of the parties;
6.    The length of absence from the job market of the party seeking maintenance;
7.    The parental responsibilities for the children;
8.    The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;
9.   The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;
10.   The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;
11.   The income available to either party through investment of any assets held by that party;
12.   The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment;
13.   The nature, amount, and length of pendent lite support paid, if any, and
14.   Any other factors which the court may deem relevant.            

In September of 2014 the New Jersey legislature added additional factors to examine making clear that courts need to consider "the practical impact of the parties’ need for separate residences and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage or civil union, to which both parties are entitled, with neither party having a greater entitlement thereto.” For marriages of less than 20 years, open durational alimony (alimony without a specified ending date) is not appropriate, and alimony cannot exceed the length of the marriage except in “exceptional circumstances” taking into consideration the ages of the parties, the dependency of one party on the other, the health of the parties, whether one party gave up a career and/or supported the career of the other spouse, whether one party received a disproportionate share of equitable distribution, the ability of either party to self-support, tax considerations, and other factors the court deems equitable, relevant and material.

Even considering these factors, it's tough to maintain two households on the same amount of income that previously maintained one.  These factors are necessarily subjective which makes litigation in New Jersey somewhat unpredictable.  Still, in mediation or a negotiated divorce, the parties can consider these factors to help them reach a fair settlement.  

Spousal Maintenance and Taxes

With the passage of new tax laws for 2019, the deductibility of spousal maintenance/alimony has become a complex issue and one which probably not a consideration for most divorces.

The general rule under federal law is that spousal maintenance/alimony is not deductible to the payor and is not considered taxable income to the payee.

There are exceptions for amendments to pre-2019 divorces and divorce agreements. There are also some exceptions under state laws.