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Understanding Unallocated Support in Illinois

unallocated support, St. Charles divorce attorneysIn most cases, child support and spousal maintenance are two separate payments ordered payable to one spouse during a divorce. There are certain occasions, however, where they may be combined as one payment. This most often occurs for tax purposes, but it can happen in other situations, depending upon the specific facts of your case.

How It Works

Unallocated support is the term used when the same person pays both child support and maintenance in one combined payment instead of two. This is not something that a court can order in Illinois, though it will generally abide by the agreement of the spouses to handle support issues this way. The Illinois Marriage and Dissolution of Marriage Act states that the court may not order unallocated support “in any dissolution judgment or in any post-dissolution order,” unless the spouses agree beforehand.

If you and your spouse agree to handle support in this manner, the paying spouse will simply pay one lump sum—on a monthly basis, most likely—to the recipient for both child support and maintenance. As one might assume, this method is usually only successful if you and your soon-to-be-ex-spouse have a civil working relationship, otherwise a negotiated agreement regarding unallocated support would not be likely.

Tax Questions

One might wonder why any couple would resort to this somewhat complex process, rather than simply paying child support and spousal maintenance in the normal way. The answer is that when one spouse earns significantly more than the other, unallocated support can provide a tax benefit for the paying spouse, which can, in turn, be beneficial for the recipient. Child support is neither taxable nor tax-deductible, but maintenance is considered income for the recipient and deductible for the payer.

Thus, a paying party who might owe a significant amount to a recipient making far less money has an incentive to pay it and pay on time. Otherwise, he or she might lose a significant tax break that could cost them even more money. The recipient, as one might imagine, gains by having their support paid on time and in compliance with the court’s order. In some cases, the recipient can even negotiate for increased support to offset his or her resulting tax liabilities.

Seek Experienced Legal Assistance

If you think unallocated support is an option that could would work in your divorce, contact an experienced Kane County divorce attorney at Bochte, Kuzniar & Navigato, P.C. today. Our team will work with you in developing a divorce agreement that meets your needs and protects your rights. Call 630-377-7770 today to set up an appointment.

 

Sources:

https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/interest-dividends-other-types-of-income/alimony-child-support-court-awards-damages/alimony-child-support-court-awards-damages-1

http://www.ilga.gov/legislation/ilcs/documents/075000050K504.htm

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