Maintenance (Alimony) Frequently Asked Questions: Initial Determinations
Main Alimony FAQs
- What is alimony?
In Colorado, the term alimony is not used, though it is the common term most people recognize. Pursuant to statute, alimony is actually called “maintenance.” Maintenance, or alimony, is support, separate from child support, specifically designed for the financial support of one spouse by the other. This support is geared towards making sure that the other spouse has the ability to meet his or her basic financial needs. The amount of maintenance to be paid depends on various factors, such as the income of the parties, the length of the marriage, other financial circumstances of the parties (such as debt load or other financial obligations), the standard of living obtained during the marriage, whether one party is caring for young children, and more. Unlike child support, alimony is generally a gray area, meaning there is not a specific formula to be used in many cases. There is a temporary maintenance formula which can be applied, at the judge’s discretion, to cases in which the combined adjusted gross income of the husband and wife is less than $75,000 per year. Alimony can only be ordered in a divorce case, not a custody or any other case. Our Denver area family law attorneys can assess your case in terms of whether you may be entitled to alimony or whether you are at risk for paying alimony.
- Does my overtime count as income for alimony purposes?
When determining income for alimony purposes, C.R.S. 14-10-114 defers to C.R.S. 14-10-115, the Colorado child support statute, for the definition of income. C.R.S. 14-10-115 indicates that for child support calculation purposes, voluntary overtime does not count as income. If the overtime is mandatory, it does. The situation differs when dealing with alimony. In an alimony situation, a court can look at voluntary overtime as an economic circumstance and factor it in, but will generally only do so if there is a history or pattern of the overtime being an integral and regular part of the party’s earnings. There is no black and white rule and each judge has a modicum of discretion in terms of how he or she will factor in the overtime, if at all, when determining alimony.
- How does alimony affect child support?
Pursuant to the Colorado child support statute, alimony counts as income for child support purposes to the child support recipient. Conversely, alimony paid by the party also paying child support is deducted from his or her income. Thus, the more alimony a person pays, the lower the amount of child support he or she owes. As Denver child support attorneys, it is not uncommon for us to see modifications of child support centering on the termination of alimony. Once alimony stops, the income of the child support recipient goes down. For the payer, it goes up. If the change in incomes triggers a 10% or more change in the bottom line in the child support calculation, then the child support figure becomes modifiable. Alimony payed or received counts in separate child support or custody cases as well, not just in the case in which the alimony is ordered.
- How long does alimony run?
The issue of how long an award of alimony can run is also a gray question. One of the significant factors in assessing an alimony case is the length of the marriage prior to the divorce being completed. We are often left making educated assumptions about what is a proper length of time. One very loose rule of thumb that attorneys may go by in terms of a starting point would be ½ the length of a marriage. For example, in a 14 year marriage, one side may say they want 7 years of alimony. The other side will obviously argue that it should be less. The ultimate length of time is either going to be agreed to or will be subject to the judge’s discretion. The age of the parties can also play a significant factor. If the parties have been married 30 years and are in their 50's, it stands to reason that in cases in which one party has been the primary breadwinner, alimony could run until retirement, or potentially for the life of either party. Courts will also factor in how long it may take the recipient to become self-sufficient, such as how long he or she will need to complete college or some other sort of career training. Parties can lock in on an actual length of time via a maintenance agreement that is contractual and non-modifiable in nature. In these instances, the parties agree to a specific duration and the court is divested of jurisdiction to change that. In most instances, alimony will terminate upon the death of either party or the re-marriage of the recipient, regardless of the original time frame set.
- Is alimony tax deductible?
We must preface this answer by indicating that we are not giving tax or tax law advice. For specific tax advice you must contact an accountant or the IRS. In a general sense, minus any intricate nuances, alimony paid may generally be taken as an income reducing deduction by the payer and will be counted as income to the recipient. Alimony is viewed differently from child support, which is not deductible or counted as income towards the recipient.
- What is the temporary maintenance formula?
Pursuant to C.R.S. 14-10-114, for families with a combined adjusted gross income of less than $75,000 per year, the court can apply the temporary maintenance formula. Temporary maintenance runs while the case is pending up to the time the decree enters. The specific formula is 40% of the higher earner’s income minus 50% of the lower earner’s income. Courts will not always apply this in an exact sense, as the judge has the ability to forego application of the formula if such would cause financial hardship for the payer. In such instances, the payer will generally be responsible for a debt and obligation load, such as credit cards, mortgages, etc., that would make application impractical or unfair.
- Is there an adjustment to the maintenance (alimony) formula?
Yes. Pursuant to C.R.S. 14-10-114, the basics of the maintenance formula set forth with the 2014 change to statute indicate that the formula for calculating maintenance is 40% of the higher income earner’s gross monthly income minus 50% of the lower income earner’s gross monthly income. Thus, looking at a family in which the wife earns $8,000 per month and the husband earns $4,000 per month, the formula would lead to a monthly maintenance payment of $1,200 (.4 x $8000 = $3,200 - $2000 [one half of $4000]). However, statute also makes adjustments to the basic formula calculation by indicating that the total of the maintenance recipient’s work income and alimony received cannot be greater than 40% of the aggregate family income. In the scenario set forth above, the combined family income is $12,000 per month. 40% of that would be $4,800 per month. Thus, with the adjustment, the husband could only receive $800 per month in maintenance, which, when coupled with his $4,000 per month in gross income, equals $4,800. Your Denver divorce attorney can help you determine what alimony might be in your divorce case.