Maintenance Under the Child Support Standards Act

Since the 1989 adoption by the New York State legislature of the Child Support Standards Act (CSSA) (Domestic Relations Law ' 240[1-b]; Family Court Act ' 413.), a substantial body of case law has been developed with respect to its interpretation. As a result, the application of the CSSA can be more nuanced than a straightforward reading of the statute suggests.

A recent decision by the Second Department, Krukenkamp v. Krukenkamp, 2008 NY Slip Op. 06570, 2008 WL 3063675 (2nd Dept. 2008), highlights one of the provisions of the CSSA as interpreted by the case law which some may find illuminating ' or others, maddening, depending on one's perspective. As discussed below, the Krukenkamp case stands for the proposition that when child support is calculated under the CSSA in a post-divorce proceeding, maintenance payments that were originally excluded from the recipient's total income at the time of divorce are now included in his or her adjusted gross income to calculate the recipient's child support obligation.

Let's examine New York case law as it has developed with respect to this issue, as well as explore the wisdom of its continued application.

A Bit of Historical Perspective

First, some background is in order. Family law practitioners know that the CSSA provides for maintenance paid or to be paid to be subtracted from the payor's income to arrive at the adjusted gross income used in the child support calculation. See Domestic Relations Law ' 240(1-b)(b)(5)(vii)(C). (Some forget the requirement that such deduction is only permissible if the child support order or agreement provides for a specific adjustment upward in child support upon the termination of such maintenance payments. See Id.; Huber v. Huber, 229 AD2d 904 (4th Dept. 1996).) Are those maintenance payments at the time of the initial order or judgment and then added to the recipient's income for the calculation of his or her child support obligation? The answer from the courts has been a resounding “No.” See Wallach v. Wallach, 37 AD3d 707 (2nd Dept. 2007); Lee v. Lee, 18 AD3d 508 (2nd Dept. 2005); Shapiro v. Shapiro, 35 AD3d 585 (2nd Dept. 2006); Frost v. Frost, 49 AD3d 1150 (4th Dept. 2008); Huber, at 905. The practical result of the case law in this regard is this: 1) A maintenance recipient who is the non-custodial parent receives a “free pass” on her child support obligation with respect to such maintenance, which is not included in her income for child support purposes; and 2) A custodial parent receiving maintenance has a lower pro-rata contribution for child support add-ons since her maintenance is not counted as income, and thus receives a “free pass” in this respect.

Some may argue that such a free pass is good public policy, since the specific purpose of maintenance is to enable the recipient to become self-sufficient, not to provide a source of child support. Others may counter that the CSSA specifically provides for the inclusion of all income that is required to be reported in one's federal income tax return in order for children to receive the appropriate level of support from both parents.

Unfortunately, it seems that the reasoning of the courts as to why prospective maintenance payments are not included as income to the recipient under the CSSA child support calculation is much more basic, as can be seen in the line of cases culminating in Krukenkamp. These cases deal with the issue of whether, in a child support proceeding, past maintenance payments reported on a recipient's federal income tax return are included in the maintenance recipient's income for child support purposes.

At first blush, it would seem that if these maintenance payments were not included in the maintenance recipient's income at the time of the divorce, they should not be included in the recipient's income in further child support proceedings. Simple, right? However, Krukenkamp and the cases upon which it relies reach the opposite conclusion based on one of the provisions of the CSSA.

The Krukenkamp Case

In Krukenkamp, the father and mother shared joint custody of their child, with the mother, who was receiving maintenance payments from the father, possessing physical custody. Following a change in physical custody, the father filed a family court petition seeking child support from the mother. The Support Magistrate, in calculating the mother's child support obligation, included in her income the maintenance payments she was receiving from the father. After the mother filed objections to the Support Magistrate's order, the Family Court vacated the order on the basis that the Support Magistrate erred in including in the mother's income the maintenance payments received from the father and reported on her most recent federal income tax return.

The Second Department reversed the Family Court, holding that:

The Child Support Standards Act requires the court to establish the parties' basic child support obligation as a function of the “gross (total) income” that is, or should have been reflected on the party's most recently filed income tax return ' Since, in the present case, the total income reported on the mother's most recently filed tax return included the maintenance payments she had received from the father that year, in the amount of $100,000, that sum was improperly excluded from her income for the purpose of calculating her child support obligation '

The Krukenkamp court added that the cases relied upon by the Family Court were inapposite because the prospective maintenance awards in those cases were made concurrently with the child support award, and thus “viewed at the time of the decision” such payments “did not fall within the definition of gross (total) income as should have been or should be reported in the most recent federal income tax return.” (Citations omitted.)

In other words, the Krukenkamp court viewed this issue as a simple application of the provisions of the CSSA. When maintenance payments have already been or should be reported on a recipient's federal income tax return, such payments should be included in the recipient's income for CSSA purposes. If the maintenance payments are prospective in nature, and thus (obviously) have not yet been reported on the recipient's federal income tax return, the prospective payments are not included in the recipient's income for child support purposes.

Krukenkamp relied on prior Second Department cases that reached the identical conclusion in drawing a distinction between prospective versus current maintenance payments in determining whether such payments were includable in a maintenance recipient's “income” for CSSA purposes.

Other Cases

In Baldino v. Baldino, 232 AD2d 480 (2nd Dept. 1996), a post-judgment family court modification proceeding, the Second Department held that since the mother's maintenance payments were income to her under Internal Revenue Code ' 71(b), the maintenance received by the mother was properly includable in her gross income. Clearly, if such maintenance payments had been non-deductible to the father and non-taxable to the mother, the Baldino court would have excluded such payments from the mother's income for CSSA purposes. Similarly, in Diamond v. Diamond, 254 AD2d 288 (2nd Dept. 1998), another post-judgment family court modification proceeding, the Second Department held that the Hearing Examiner should have included the respondent mother's maintenance payments in her income for CSSA purposes.

Given the Second Department's holdings in Baldino, Diamond and Krukenkamp (without commenting on their soundness for now), its decision in Tryon v. Tryon, 37 AD3d 455 (2nd Dept. 2007) ' decided one year before Krukenkamp but years after Baldino and Diamond ' is somewhat perplexing. In Tryon, the mother brought a post-judgment proceeding in the matrimonial action for an upward modification of child support, which was decided approximately one year following entry of the parties' judgment of divorce. The mother was receiving maintenance payments from the father, which presumably she was required to have reported on her federal income tax return for the year prior to the post-judgment proceeding. Notwithstanding the above facts, the Second Department held that upon recalculating child support on remand, the Supreme Court should deduct the amount of maintenance paid by the father to determine his income for CSSA purposes, but should not add the same amount to the mother's income. Although not stated in the decision, it is possible (since the post-judgment proceeding was filed soon after the divorce) that the mother had not yet received maintenance payments from the father by the date that she filed her federal income tax return. Otherwise, the holding in this case is a mystery.

Conclusion

Does the distinction, in the calculation of income for CSSA purposes, between the treatment of prospective maintenance payments and maintenance that has been declared on an income tax return, make sense? Clearly it does not. The timing of a maintenance award should not affect whether or not it is includable in a recipient's income for CSSA purposes. The courts should be free to decide how to treat such maintenance payments in the context of public policy and not in the context of what the language of the statute may or may not require. Indeed, New York case law has already held that, notwithstanding the language of the CSSA requiring child support to be based on the parties' most recently-filed income tax returns, the courts are free to base child support on the parties' earnings at the time of the hearing. See Baffi v. Baffi, 24 AD3d 578 (2nd Dept. 2005); Pollack v. Pollack, 3 AD3d 482 (2nd Dept. 2004). If so, the courts should interpret the statute with similar latitude when considering whether maintenance should be treated as income to the recipient for CSSA purposes, and should arrive at a consistent position regardless of the timing of its receipt.

Benjamin E. Schub, a member of this newsletter's Board of Editors, is a member of the law firm of Berman, Bavero, Frucco & Gouz, P.C., located in White Plains.

Since the 1989 adoption by the New York State legislature of the Child Support Standards Act (CSSA) (Domestic Relations Law ' 240[1-b]; Family Court Act ' 413.), a substantial body of case law has been developed with respect to its interpretation. As a result, the application of the CSSA can be more nuanced than a straightforward reading of the statute suggests.

A recent decision by the Second Department, Krukenkamp v. Krukenkamp , 2008 NY Slip Op. 06570, 2008 WL 3063675 (2nd Dept. 2008), highlights one of the provisions of the CSSA as interpreted by the case law which some may find illuminating ' or others, maddening, depending on one's perspective. As discussed below, the Krukenkamp case stands for the proposition that when child support is calculated under the CSSA in a post-divorce proceeding, maintenance payments that were originally excluded from the recipient's total income at the time of divorce are now included in his or her adjusted gross income to calculate the recipient's child support obligation.

Let's examine New York case law as it has developed with respect to this issue, as well as explore the wisdom of its continued application.

A Bit of Historical Perspective

First, some background is in order. Family law practitioners know that the CSSA provides for maintenance paid or to be paid to be subtracted from the payor's income to arrive at the adjusted gross income used in the child support calculation. See Domestic Relations Law ' 240(1-b)(b)(5)(vii)(C). (Some forget the requirement that such deduction is only permissible if the child support order or agreement provides for a specific adjustment upward in child support upon the termination of such maintenance payments. See Id.; Huber v. Huber , 229 AD2d 904 (4th Dept. 1996).) Are those maintenance payments at the time of the initial order or judgment and then added to the recipient's income for the calculation of his or her child support obligation? The answer from the courts has been a resounding “No.” See Wallach v. Wallach , 37 AD3d 707 (2nd Dept. 2007); Lee v. Lee , 18 AD3d 508 (2nd Dept. 2005); Shapiro v. Shapiro , 35 AD3d 585 (2nd Dept. 2006); Frost v. Frost , 49 AD3d 1150 (4th Dept. 2008); Huber, at 905. The practical result of the case law in this regard is this: 1) A maintenance recipient who is the non-custodial parent receives a “free pass” on her child support obligation with respect to such maintenance, which is not included in her income for child support purposes; and 2) A custodial parent receiving maintenance has a lower pro-rata contribution for child support add-ons since her maintenance is not counted as income, and thus receives a “free pass” in this respect.

Some may argue that such a free pass is good public policy, since the specific purpose of maintenance is to enable the recipient to become self-sufficient, not to provide a source of child support. Others may counter that the CSSA specifically provides for the inclusion of all income that is required to be reported in one's federal income tax return in order for children to receive the appropriate level of support from both parents.

Unfortunately, it seems that the reasoning of the courts as to why prospective maintenance payments are not included as income to the recipient under the CSSA child support calculation is much more basic, as can be seen in the line of cases culminating in Krukenkamp. These cases deal with the issue of whether, in a child support proceeding, past maintenance payments reported on a recipient's federal income tax return are included in the maintenance recipient's income for child support purposes.

At first blush, it would seem that if these maintenance payments were not included in the maintenance recipient's income at the time of the divorce, they should not be included in the recipient's income in further child support proceedings. Simple, right? However, Krukenkamp and the cases upon which it relies reach the opposite conclusion based on one of the provisions of the CSSA.

The Krukenkamp Case

In Krukenkamp, the father and mother shared joint custody of their child, with the mother, who was receiving maintenance payments from the father, possessing physical custody. Following a change in physical custody, the father filed a family court petition seeking child support from the mother. The Support Magistrate, in calculating the mother's child support obligation, included in her income the maintenance payments she was receiving from the father. After the mother filed objections to the Support Magistrate's order, the Family Court vacated the order on the basis that the Support Magistrate erred in including in the mother's income the maintenance payments received from the father and reported on her most recent federal income tax return.

The Second Department reversed the Family Court, holding that:

The Child Support Standards Act requires the court to establish the parties' basic child support obligation as a function of the “gross (total) income” that is, or should have been reflected on the party's most recently filed income tax return ' Since, in the present case, the total income reported on the mother's most recently filed tax return included the maintenance payments she had received from the father that year, in the amount of $100,000, that sum was improperly excluded from her income for the purpose of calculating her child support obligation '

The Krukenkamp court added that the cases relied upon by the Family Court were inapposite because the prospective maintenance awards in those cases were made concurrently with the child support award, and thus “viewed at the time of the decision” such payments “did not fall within the definition of gross (total) income as should have been or should be reported in the most recent federal income tax return.” (Citations omitted.)

In other words, the Krukenkamp court viewed this issue as a simple application of the provisions of the CSSA. When maintenance payments have already been or should be reported on a recipient's federal income tax return, such payments should be included in the recipient's income for CSSA purposes. If the maintenance payments are prospective in nature, and thus (obviously) have not yet been reported on the recipient's federal income tax return, the prospective payments are not included in the recipient's income for child support purposes.

Krukenkamp relied on prior Second Department cases that reached the identical conclusion in drawing a distinction between prospective versus current maintenance payments in determining whether such payments were includable in a maintenance recipient's “income” for CSSA purposes.

Other Cases

In Baldino v. Baldino , 232 AD2d 480 (2nd Dept. 1996), a post-judgment family court modification proceeding, the Second Department held that since the mother's maintenance payments were income to her under Internal Revenue Code ' 71(b), the maintenance received by the mother was properly includable in her gross income. Clearly, if such maintenance payments had been non-deductible to the father and non-taxable to the mother, the Baldino court would have excluded such payments from the mother's income for CSSA purposes. Similarly, in Diamond v. Diamond , 254 AD2d 288 (2nd Dept. 1998), another post-judgment family court modification proceeding, the Second Department held that the Hearing Examiner should have included the respondent mother's maintenance payments in her income for CSSA purposes.

Given the Second Department's holdings in Baldino , Diamon d and Krukenkamp (without commenting on their soundness for now), its decision in Tryon v. Tryon , 37 AD3d 455 (2nd Dept. 2007) ' decided one year before Krukenkamp but years after Baldino and Diamond ' is somewhat perplexing. In Tryon, the mother brought a post-judgment proceeding in the matrimonial action for an upward modification of child support, which was decided approximately one year following entry of the parties' judgment of divorce. The mother was receiving maintenance payments from the father, which presumably she was required to have reported on her federal income tax return for the year prior to the post-judgment proceeding. Notwithstanding the above facts, the Second Department held that upon recalculating child support on remand, the Supreme Court should deduct the amount of maintenance paid by the father to determine his income for CSSA purposes, but should not add the same amount to the mother's income. Although not stated in the decision, it is possible (since the post-judgment proceeding was filed soon after the divorce) that the mother had not yet received maintenance payments from the father by the date that she filed her federal income tax return. Otherwise, the holding in this case is a mystery.

Conclusion

Does the distinction, in the calculation of income for CSSA purposes, between the treatment of prospective maintenance payments and maintenance that has been declared on an income tax return, make sense? Clearly it does not. The timing of a maintenance award should not affect whether or not it is includable in a recipient's income for CSSA purposes. The courts should be free to decide how to treat such maintenance payments in the context of public policy and not in the context of what the language of the statute may or may not require. Indeed, New York case law has already held that, notwithstanding the language of the CSSA requiring child support to be based on the parties' most recently-filed income tax returns, the courts are free to base child support on the parties' earnings at the time of the hearing. See Baffi v. Baffi , 24 AD3d 578 (2nd Dept. 2005); Pollack v. Pollack , 3 AD3d 482 (2nd Dept. 2004). If so, the courts should interpret the statute with similar latitude when considering whether maintenance should be treated as income to the recipient for CSSA purposes, and should arrive at a consistent position regardless of the timing of its receipt.

Benjamin E. Schub, a member of this newsletter's Board of Editors, is a member of the law firm of Berman, Bavero, Frucco & Gouz, P.C., located in White Plains.