In today’s Divorce Academy video, Kevin discusses how to calculate maintenance (alimony) in New York.
Hi Everyone. Welcome to Divorce Academy. I’m Kevin Handy and I’m one of the New York Divorce Mediators here at SnapDivorce. In today’s Divorce Academy video, we’re going to talk about how maintenance or alimony is calculated in New York.
1. Know That There are Several General Things You Should Know About Maintenance (Alimony) in New York
We’ll start off by going over some general things you should know about maintenance in New York. And then I’ll go over some sample calculations. I think you’ll find it pretty helpfully if you are wondering how your alimony or maintenance is going to be calculated.
2. Know that Alimony is Called “Maintenance” in New York
The first think you should know is that maintenance and alimony are the same thing. In most states it’s called alimony. In New York it is called maintenance. I suppose someone in the legislature thought, “you know what, alimony has a bad name, let’s call it something else and maybe it will make it more palatable to people who are going to have to pay it.” So, they decided to call it “maintenance.”
3. Know that Maintenance is Always Paid by the Higher-Earning Spouse in New York
The second thing you should know is that it is always paid by the higher earning spouse. So, it doesn’t matter if it’s the husband or the wife. Whoever is the higher earning spouse is going to pay the lower earning spouse the maintenance as long as it is dictated by the formula. I’ll get to the formula in a little bit.
4. Know that tThere are Three Types of Maintenance in New York: Spousal Support, Temporary or Pendente Lite Maintenance, and Post-Divorce Maintenance
There are three types of maintenance in New York. There’s spousal support, temporary or pendente lite maintenance, and post-divorce maintenance. All three of them are calculated pursuant to the same formula. The only difference is the timing of the payments.
Spousal support is pre-divorce maintenance. Maybe someone moves out of the marital residence, but there’s no divorce filed. Maybe it’s a trial separation. Then the lower-earning spouse can go out and seek spousal support.
During the pendency of the divorce – once a divorce has been filed – then it’s called temporary or pendente lite maintenance.
Then after the divorce is over, it’s post-divorce maintenance.
Just different names, basically the same thing.
5. Know that in New York Maintenance (Alimony) is Calculated Pursuant to a Two-Step Formula
In New York, maintenance is based on a formula. That formula is dependent on the parties’ incomes and if they have children, and it’s a two-part or two-step formula.
The formula itself is relatively simple. But I have income starred here because a lot of times that’s where the issues are going to come up – what the parties’ income are. Is someone running their own business? What are they actually making? Is someone not working up to their earning capacity? Should someone be working? Those sorts of things.
Even though the maintenance formula is going to seem pretty simple to you, or relatively simple, know that there is a lot of room for argument in what someone should or should not pay. I’m also talking about deviations, which can also be a source for argument or challenges to the amount of maintenance.
6. Know that There are Two Formulae to Calculate Maintenance (Alimony) in New York: One for Couples With Children and One for Couples Without Children
Like I said before, the formula is different for marriages where there are children or no children. By children, I mean children who are going to be subject to a support order, which are generally unemancipated children under the age of 21. Unemancipated means they are not married themselves or in the military or self-supporting.
7. Know that the Formula to Calculate Maintenance (Alimony) in New York is Based on the Parties’ Net Incomes
The formula is also based on income. The income they are going to use for maintenance in New York is going to be gross income minus social security, Medicare and some local taxes. They are not taking off state of federal taxes to reach the net income. So just be aware of that. So when you are talking gross income you are just taking away the Social Security, Medicare and some local taxes.
8. Know that the Formula to Calculate Maintenance (Alimony) in New York Only Considers Income to $184,000
The next thing to know is that there is a $184,000 limit on income that is subject to the formula. If their net income after subtracting Social Security, Medicare and certain local taxes is greater than $184,000, then the formula is not going to apply to them over the $184,000. Instead they look at factors: age, health, standard of living, differences in earnings. If someone is making way more than that, most likely the maintenance order is going to be higher than the formula with the $184,000 would suggest. So that’s just something else to keep in mind.
9. Calculate the Amount of Maintenance (Alimony) Payable in New York
Here I came up with an example where the net income of the lower-earning spouse is $50,000 and the net income of the higher-earning spouse is $100,000. Then I ran it without minor children and then with minor children.
10. If You Don’t Have Children, Calculate Maintenance (Alimony) in New York Using the Formula for Couples Without Minor Children.
Here is the maintenance formula for couples without minor children. I mentioned it is two-part. You have to calculate two parts and then you have to compare them and then you can determine what the amount of maintenance is going to be.
11. Calculate Maintenance (Alimony) in New York Using Part 1 of the Formula for Couples Without Minor Children
Without minor children you take 20% of the lower-earning spouse’s net income and 30% of the higher-earning spouse’s net income. In this example we have $50,000 for the lower-earning spouse’s income. 20% of that is $10,000. And we have $100,000 for the higher-earning spouse, and 30% of that is $30,000. Then you subtract $30,000 minus $10,000 and that equals $20,000. Hold that for a minute.
12. Calculate Maintenance (Alimony) in New York Using Part 2 of the Formula for Couples Without Minor Children
Then you have to go onto Part 2.
Part 2, you take their combined income: $50,000 plus $100,000 equals $150,000. And then you take 40% of their combined income. 40% of $150,000 is $60,000. Then you take that number, the $60,000, and you subtract the lower-earning spouses net income.
So here we’ve got $60,000 minus $50,000. That equals $10,000.
13. Divide the Lesser Amount Calculated in Part 1 and Part 2 by 12 to Arrive at the Monthly Amount of Maintenance (Alimony) Payable in New York for Couples Without Minor Children
So, in Step One we got $20,000 and in Step 2 we got $10,000. You take the lower of those two numbers and that is going to be the annual maintenance number. $10,000 divided by 12, you are looking at about $833 per month.
14. Considerations About Waiving Maintenance (Alimony) in New York
Next, we can look at the formula with minor children. And, I put a little star here because frequently you’ll have couples who don’t want to address maintenance. The higher-earning spouse never wants to pay maintenance. It’s almost universal. So, you’ll have couples come in and say, “Hey, we want to pay child support, but there’s no maintenance. My spouse is agreeing to waive maintenance. Don’t calculate that because I don’t want to put the idea in their head that they should get maintenance.” The issues in New York is that before you can calculate child support, you have to calculate the maintenance. So, it’s almost impossible to get around calculating the maintenance if there is going to be a child support order. Just keep that in mind.
And, by the way, for everyone who thinks, “I don’t want to pay maintenance . . . I don’t want to tip my spouse off.” Your spouse knows about maintenance and alimony. Everyone knows about it. You are not actually going to be hiding anything from them. If they want to waive it, or if you want to discuss it, that’s great. In fact, if it is a potential maintenance case, you have to discuss it because, when you get to court or in the marital settlement agreement, you’re going to have to address whether there is going to be maintenance or not.
15. If You Don’t Have Children, Calculate Maintenance (Alimony) in New York Using the Formula for Couples Without Minor Children.
16. Calculate Maintenance (Alimony) in New York Using Part 1 of the Formula for Couples With Minor Children
Moving onto the formula. With minor children, the formula is similar, the percentages are just a little different.
With minor children, you take 25% of the lower-earning spouse’s net income. So here it’s $50,000. 25% of that is $12,500. Take 20% of the higher-earning spouse’s income. $100,000 times 20% equals $20,000. The difference is $7,500 ($20,000 – $12,500). So you hold that number.
17. Calculate Maintenance (Alimony) in New York Using Part 2 of the Formula for Couples With Minor Children
Then use the same Step 2 formula as above. You take the combined income of $150,000 times 40% equals $60,000. $60,000 minus the lower-earning spouses net income of $50,000 equals $10,000.
18. Divide the Lesser Amount Calculated in Part 1 and Part 2 by 12 to Arrive at the Monthly Amount of Maintenance (Alimony) Payable in New York for Couples With Minor Children
So in this example, the $7,500 is lower, so that is going to be the annual maintenance. $7,500 divided by 12 is $625 per month. That would be the monthly maintenance order in that case. Of course, the reason it is lower is because then you go on and calculate what the child support would be.
19. Know the General Rule for When There Will be a Maintenance (Alimony) Order in New York
One thing is that if the lower earning spouse’s income – if it’s lower than 2/3rds of the higher-earning spouse’s income – there is probably going to be a maintenance order.
20. Determine How Long Maintenance (Alimony) Will Last in New York
Then, of course, everyone wants to know what the duration is. New York has guidelines as to the duration of maintenance as well. For marriages from 0 to 15 years, it is 15-30% of the duration of the marriage. If you’ve got a 10-year marriage, it would be 1.5 to 3 years of maintenance. If you have a 15-20-year marriage, it is 30-40% of the duration of the marriage. And more than 20 years, it is 35-50% of the duration of the marriage.
One thing to keep in mind with regard to all of the calculations is that they are all subject to deviation based on different factors. I mentioned them before, ages, health, contributions to the marriage, differences in earning capacities. There is also a catch-all, so the court can really take into consideration anything, so there is a lot of room for deviation, especially in higher income cases.
21. Know that New York Did Not Change How Maintenance is Calculated as a Result of the 2019 Changes to the Federal Tax Code making Maintenance (Alimony) Non-Deductible
The final thing I want to note is that in 2019 there were changes to the federal tax code and and maintenance or alimony is no longer deductible to the payor and no longer includible to the payee. Many states have changed their formula to account for that tax shift. New York has not done so. They may do so in the future, but that’s not the case now.
So that is how you calculate maintenance in New York. I hope this has been helpful, and I’ll see you next time on Divorce Academy.