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February 27, 2022
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On March 1, 2020 the Child Support Standards Act raised the income cap upon which the calculation of child support is based from $148,000 to $154,000.00. as to spousal maintenance, dictated by the Maintenance Guidelines Act, the income cap upon which spousal maintenance is calculated was lifted to include income of up to $192,000. These increases reflected increases in the Consumer Price Index. The Law also changed as to tax deductions for alimony and spousal support (maintenance). The following is NOT legal advice as you must consult with a tax attorney or accountant to see what is necessary under the Tax Code. The below information is for informational purposes only. Under the IRS Code Section 215(a) alimony used to be tax deductible to the payor and taxable to the payee. Now, all divorce decrees entered after December of 2018 have no tax implications for either party. This law does not alter the tax consequences for divorces entered prior to December 2018 so if you already have a divorce decree making alimony or spousal support tax deductible you can still claim the deduction. However, there are caveats to this rule. First, a written instrument must be had such as a judgment or separation agreement that spells this out. Second, payment must be for your spouse, and not for any one else including a child. Third, the agreement can not provide that the recipient does not have to pay tax on the amount of maintenance received. Fourth the parties can not reside together. Other restrictions on pre 2018 divorce decrees that allow for the old tax rules to apply to older divorces include such things as the payment must be in cash, and the return must include the social security number of the recipient ex-spouse, and other such requirements as are listed under the relevant tax code. Another thing to be concerned with is that if the pre-2018 agreement says alimony or spousal support payments do not cease after the death of the ex-spouse, the payor can not claim the tax deduction and might even have to pay back the amount of the tax benefit received. Again, consult with a tax attorney but be sure your divorce attorney knows these distinctions as he or she is the one who will do the drafting.
There have been changes in the way the Courts treat long term marriages. In a 2016 case, the Second Department held that the net proceeds of the sale of the marital residence had to be distributed equally because there, the marriage was 17 years old and the lengthy marriage showed a true partnership between the parties. Scaramucci v. Scaramucci, 140 A.D.3d 848 (2d Dep’t 2016) Yet, in another 2018 case, the case of Sogloff to Cravo v. Diegel, 163 A.D.3d 920, 83 N.Y.S.3d 91 (2d Dep't 2018) the Court held that in a 24 year marriage, a long marriage, the Husband was only entitled to 45% of the marital assets taking into consideration that the Husband’s contributions to the marital wealth was diminimus. The takeaway here is that although the courts are leaning toward an equal distribution of marital assets in long term marriages, the courts still adhere to the principals of “equitable distribution” and may consider all other factors in the statute when dividing marital assets between the parties. For instance, some of the factors a court will consider in dividing up assets is the parties’ contribution to the care of the children and of other household responsibilities. Mack v Mack, 169 AD3d 1214, 94 N.Y.S.3d 683 (3d Dep’t 2019)To conclude, while we are seeing a trend toward equal distribution of assets in long term marriages,there are several exceptions that are still made where the court deems it necessary.
By: Lisa Beth Older
Your New York Divorce Lawyer