In many Illinois divorces, both child support and spousal maintenance may be awarded by the court. If this does happen in your case, however, the tax implications can be prohibitive. If it is possible, you may be able to help shift that burden using what Illinois calls unallocated support. While it is not always possible to use this mechanic, sometimes it can make a significant difference, especially for custodial parents.

Current Tax Law

Under current tax law, spousal support counts as taxable income for the recipient, and as deductible for the payor. Conversely, child support is neither deductible nor taxable. In many divorce cases, one spouse makes significantly more money than the other, and thus, any tax deduction that they are able to obtain can be very welcome. In order to get the benefit of the deduction and the lower tax rate, some couples may be able to treat spousal and child support as one lump sum referred to as unallocated.

When two people decide to divorce, one of the most common questions that comes up is the issue of the payment of maintenance , a form of spousal support in Illinois. While not every divorce will result in someone paying spousal support, many will. Whether you will be the one receiving the support or making the support payment, it is a smart idea to be familiar with how maintenance works in Illinois before you finalize your divorce.

Step One: Maintenance Award

An Illinois court will consider many different factors when assessing whether spousal support is warranted. These factors may be found in Section 504 of the Illinois Marriage and Dissolution of Marriage Act. Some of these factors include:

Cohabitation is a legal concept that has been around for as long as marriage, but it has only recently begun to acquire legal significance in the last two or three decades, at least in the United States. Cohabitating is done by couples who may want to try out living together or see how they function as a unit before taking the plunge into marriage and is not a legal status. However, there are certain legal facts that one should still be aware of if they decide to cohabitate, mostly to do with support from a previous marriage.

Not True in All States

In many states, orders for maintenance can generally be modified or terminated upon a showing of a “substantial change in circumstances” - for example, if an obligor loses their job and takes a new one that only pays enough to put a roof over their head, they might ask for maintenance to be terminated or at least put in abeyance because they lack the money to pay it. This is, however, an extremely unusual situation - most of the time, spousal support can only reliably be terminated upon the recipient’s remarriage or on the death of one spouse.

In many Illinois divorces, spousal support, also called maintenance, is granted to one spouse, usually the one in a lower income bracket. However, contrary to perceptions in popular culture, it does not last until death. There are multiple occasions when spousal support can legally end before the ex-spouse’s passing, and if you or your spouse may be in one of these situations, it can save you time and money in the future.

Types of Maintenance

In determining what type of maintenance should be awarded (if any), the court will examine a laundry list of factors, intended to accurately assess the needs of the spouse with less capital against the potential cost to the spouse with more assets. Some of these factors include the present and future earning capacity of both spouses, the length of the marriage and the standard of living established during that time, and any previous agreement made by the spouses, such as a prenuptial agreement, that might affect any part of marital asset division. The cessation of spousal support payments depends mostly on the type granted, as depending on which type is awarded, sometimes support may end on its own.

Last year Illinois enacted a new law to simplify the process of calculating spousal maintenance payments, sometimes known as alimony. Previously, the law did not provide courts with standardized guidelines for determining a party's maintenance obligations. That meant, under the old approach, courts considered maintenance on a case-by-case basis with inconsistent results. The new calculation is a two-step process, whereby the court:

• Subtracts 20 percent of the receiving spouse's income from 30 percent of the payor's income to find the amount of maintenance to be paid; and
• Calculates the length of the maintenance award based on the duration of the marriage.

This relatively simple mathematical process reduces much of the uncertainty associated with alimony.

Step One: Are You Entitled to Maintenance?