When calculating a child support obligation, what effect does a simultaneous spousal maintenance award have? The November 21, 2013 decision of the Appellate Division, Third Department, in Alecca v. Alecca reveals the conflict among the Departments, questions of logic, and the need for action by the Legislature.
Agreeing with Judge Anthony McGinty, deciding for the Ulster County Supreme Court, the appellate court held in Alecca that if a spousal maintenance award does not terminate until after all children have been emancipated, the maintenance award may not be deducted from the payor’s income for child support calculation purposes. Spousal maintenance does get deducted if it terminates before all children are emancipated and the awarding court provides for a specific adjustment of child support at the time of the maintenance termination.
Child support is presumptively the function of the Child Support Standards Acct (C.S.S.A.) formula (D.R.L. §240 [1-b]; F.C.A. §413). Depending upon the number of children to be supported, the presumptive formula is a certain percentage of parental income, with the obligation of the support payor being the payor’s pro rata portion of the combined parental income of both parents. In addition to the basic child support obligation, the parents’ obligation to pay additional amounts for health and child care expenses is also presumptively a function of the parents’ pro rata shares of their combined income. Although relevant, an add-on obligation for educational expenses (if warranted by the circumstances, justice, and the best interests of the child) is not expressly a function of pro rata shares.
Computation of parental income is a very detailed calculation. It begins by considering the “gross (total) income as should have been or should be reported in the most recent federal tax return.” (D.R.L. §240[1-b][b][I]). After that, certain additions and subtractions are made. Among the subtractions is any “alimony or maintenance actually paid or to be paid” to the spouse in the current action, “provided the order or agreement provides for a specific adjustment . . . in the amount of child support payable upon the termination of alimony or maintenance to such spouse . . . .”
Unless ordered or agreed otherwise, spousal maintenance is tax deductible to the payor and includable in the taxable income of the recipient. So, the first question is does the award of maintenance get included in the parental income of the recipient?
Let’s assume the following fact pattern. In a divorce action being decided in 2013, the husband (age 45) earned $100,000 in 2012; the mother (age 40) earned $30,000 in $2012. Such was the only income of the parties for that year. The parties are the parents of two children, ages 15 and 12. The trial court awards the wife $30,000 per year in spousal maintenance for five years.
Again, the first question is does the $30,000 award of maintenance get included in the parental income of the wife for child support calculation purposes (bringing her to $60,000 for the year)? Second, does it get deducted from the income of the husband for child support purposes (bringing him to $90,000 for the year)?
Uniformly, the answer to the first question is “no.” The award is not included in the wife’s income for child support calculation purposes, because no maintenance was included in the 2012 tax return. See, e.g., Lee v. Lee, 18 A.D.3d 508, 795 N.Y.S.2d 283 (2nd Dept. 2005); Huber v. Huber, 229 ad2d 904, 645 N.Y.S.2d 211 (4th Dept. 1996).
However, if after a year or two the husband seeks a modification of his child support obligation, the wife’s income will include the maintenance paid during the then prior year. This will reduce the husband’s pro rata share, and may reduce his basic child support obligation (if the trial court does not apply the statutory percentage to the entirety of the combined parental income). See, Krukenkamp v. Krukenkamp, 54 A.D.3d 345, 862 N.Y.S.2d 571 (2nd Dept. 2008). The husband may be entitled to a modification of the child support obligation after three years (D.R.L. §236[B][b][ii]).
The second question is does the $30,000 to be paid in annual maintenance get deducted from the parental income of the husband for child support calculation purposes (bringing him to $90,000 for the year)? Yes, if the order provides for a specific adjustment in the amount of child support payable upon the termination of maintenance. Assuming it does, the husband’s income for child support purposes is $90,000 ($120,000 less $30,000 in maintenance to be paid) and the mother’s income remains at $30,000. Although the parties earned $150,000 in 2012, combined parental income for child support purposes is determined to be $120,000. The husband’s pro rata share of the combined parental income is 75%; the wife’s pro rata share is 25%.
According to the formula, the husband’s basic child support obligation would be $22,500 per year (25% [for two children] of 75% of $120,000). He would pay $75% of add-on expenses for health and child care.
But now suppose the court awards the wife $30,000 per year until the wife turns 62 years old. That’s 22 years of maintenance for the wife. However, the children will both have reached 21 years old in 9 years, at which time the statutory obligation to provide child support will end.
Because maintenance payments will outlast child support payments, there is no basis to provide “for a specific adjustment . . . in the amount of child support payable upon the termination of alimony or maintenance to such spouse . . . .” As a result, the Third Department held in Alecca, there is no deduction in the calculation of the husband’s income:
That statute mandates that maintenance be deducted from income for child support purposes where the order provides for an adjustment of child support once maintenance terminates . . . . Here, maintenance will outlast child support and, therefore, the statutory deduction is not required.
Under our fact pattern, the parents’ combined income would be $150,000, with neither the husband’s, nor the wife’s income being adjusted. The husband’s pro rata share would be 80%; the wife’s 20%. The husband’s basic child support obligation would be $30,000 (25% of 80% of $150,000), assuming the court applied the statutory percentage to all of the parents’ income (the court having more discretion for income over $136,000).
So, when the husband only has to pay spousal maintenance for a few years, his child support payments will be lower. When maintenance outlasts child support, the husband pays more basic child support and his pro rata portion of add-on expenses is higher.
The result is the same in the Fourth Department. In Huber v. Huber, supra, it was held:
Further, we agree with plaintiff that, under the circumstances, the court improperly subtracted maintenance payments from defendant’s income. The statute provides that maintenance paid or to be paid should be subtracted from the payor’s income only where “the order or agreement provides for a specific adjustment … in the amount of child support payable upon the termination of alimony or maintenance” (Domestic Relations Law § 240 [1-b] [b]  [vii] [C]). Here, the judgment does not provide for an automatic adjustment of child support upon termination of maintenance. An automatic adjustment provision was not called for in this case because, under the facts herein, maintenance will outlast child support. In these circumstances, defendant was not entitled to deduct maintenance payments from his CSSA income.
However, the result is different in the Second Department. In Lee v. Lee, supra, the wife was awarded $5,000 in permanent (nondurational) maintenance. The court held it was error for the trial court not to have deducted the $60,000 per year in maintenance from the husband’s income for child support calculation purposes. See also, Talty v Talty, 75 A.D.3d 648, 906 N.Y.S.2d 295, (2nd Dept. 2010); Y. G. v. K. L., 8 Misc. 3d 1023(A), 803 N.Y.S.2d 21 (Sup. Ct. Nassau Co. 2005 [Falanga, J.])
Perhaps ironically, the ending of the child support obligation may form the basis for an increase in spousal maintenance (D.R.L. §236[B][b]).