In this article, we will answer the question, “if I modify an Illinois spousal maintenance order that was entered prior to 2019, will the new law apply?” For some foundational information about Illinois spousal maintenance law, check out our article: Illinois Spousal Maintenance 2019.
For cases in which the spousal maintenance order was entered prior to 2019, maintenance payments are tax deductible to the payor and considered income for the recipient’s income tax purposes. Prior to 2019, the amount of maintenance was taken by subtracting 20% of the recipient’s gross income from 30% of the payor’s gross income.
For cases in which the spousal maintenance order is entered in 2019 or later, maintenance payments are not tax deductible by the payor and are not subject to income tax for the recipient. For more on the ramifications of this change, check out our article, Changes to Illinois Spousal Maintenance Under the 2019 Tax Law.
In addition, to the tax ramifications, the new spousal maintenance law changes how spousal maintenance is calculated. For spousal maintenance orders entered in 2019 or later, the amount of spousal maintenance is calculated by subtracting 25% of the recipient’s net income from 33.33% of the payor’s net income. For more on how spousal maintenance is calculated, check out our articles: How to Calculate Illinois Spousal Maintenance and How is “Net Income” Determined For the Purpose of Illinois Spousal Maintenance?
Spousal maintenance orders can be modified based on a substantial change of circumstances. (More: Modification of Illinois Spousal Maintenance Explained) So, if your spousal maintenance order was entered prior to 2019 and you seek to modify it in 2019 and beyond, will the new law or the old law be applied to calculate the amount of spousal maintenance? The Illinois Marriage and Dissolution of Marriage Act provides that, in general if one of the parties seeks to modify a spousal maintenance order that was entered prior to 2019, the pre-2019 law will continue to be applied to determine both the tax treatment of the maintenance payments and the calculation of the maintenance amount, unless the parties both agree to apply the 2019 law.
This means that, despite the passage of the new law, if you seek to modify your pre-2019 maintenance order, the maintenance payments will remain tax deductible to the payor and taxable to the recipient and the court will arrive at the maintenance amount by subtracting 20% of the recipient’s gross income from 30% of the payor’s gross income. However, the parties may agree to adopt the new tax treatment, which goes hand in hand with the different calculation based on net income.
This differs from modification of Illinois child support orders, during which post 2017 child support law will be applied to pre-2017 orders if the orders are modified.