If you (or your spouse) are unable to support yourself through employment or from the income you earn from the assets you retain, you (or your spouse) may qualify for spousal maintenance. You can mutually agree on the maintenance amount and duration, or a Judge may order it if (a) you lack sufficient property to provide for your own reasonable support and (b) you are unable to support yourself through appropriate employment (“the threshold test”).
On January 1, 2014, the Colorado Legislature enacted advisory maintenance guidelines to determine the amount and duration of maintenance for those cases in which one person meets a statutory threshold test and both parties have combined gross incomes of less than $360,000. These guidelines apply to cases in which orders are entered before January 1, 2019. Under the applicable IRS tax code, the maintenance is tax deductible by the person paying the maintenance (the “payor”) and taxable to the person receiving the maintenance (the “payee”).
However, on December 22, 2017, President Trump signed the Tax Cut and Reform Bill (the 2017 Bill). Under the 2017 Bill, for divorces finalized in 2019 and thereafter, the payor can no longer deduct the maintenance, and the payee does not need to claim the support as income.
In order to accommodate this change, the Colorado Legislature enacted House Bill 18-1385, which includes new maintenance advisory guidelines. Consistent with the 2017 Bill, the Legislature adjusted the maintenance formula to accommodate the fact that the payor can no longer deduct the maintenance.
Generally, unless you otherwise agree, maintenance terminates upon a specific date, your death, your spouse’s death, or the remarriage of the party receiving the maintenance. The guidelines provide a formula for establishing the duration of maintenance.
Because we do not know if Congress will reconsider the treatment of maintenance and amend this portion of the 2017 Bill, and because interpretation of the pre-2019 and post-2019 statutes is relatively complex, it is best to take your time when making decisions about maintenance and be certain that you have all the information you need to make those decisions.