If you have children and are seeking a divorce, or if you are a party to an allocation of parental responsibilities case, a child support order may be entered. Child support is determined by statute and generally considers the following factors: the income of both parents, the number of overnights each parent has with the children, and how many children are part of the relationship.
Additionally, health insurance premiums paid for on behalf of the children, education or work-related daycare expenses, children outside of the relationship, and other extraordinary expenses will be factored into the calculation of child support.
Sometimes it is fairly easy to determine the income of each parent, especially if both parents work 40 hours a week, receiving a set hourly rate or annual income. However, it can be more difficult to calculate a parent’s income if he or she earns irregular bonuses, is self-employed, or has the ability to earn much more than he or she is currently earning. Also, other types of payments a person receives can be considered income for child support purposes, including commissions, dividends, severance pay, some types of pensions and retirement benefits, rents, interest, trust income, annuities, draws, some types of social security benefits, unemployment benefits, some types of insurance, gifts, prizes, maintenance received, some overtime, etc.
If one parent is “voluntarily unemployed,” or “underemployed,” the Court may impute that parent at his or her potential income so that child support is calculated correctly. For example, if your spouse is a doctor and is now working part time making minimum wage, the court may “impute” his or her income at the rate he or she could make as a doctor. This is to ensure that neither parent “shirks” his or her duty to the children to avoid financial responsibility.
If you are in the position where you do not know the full extent of the other parent’s income, it may be necessary to ask for additional discovery to calculate both parties’ incomes correctly.
Other Adjustments to Child Support
In addition to determining a parent’s income, it is also necessary to correctly calculate other expenses related to the children. One parent is generally required to maintain health insurance for the benefit of the children. He or she will receive a credit for the cost that is paid on behalf of the children. If the parents need daycare, so that they can either go to work or attend school, this cost will either be split in proportion to income or will be part of the child support calculation. If the parents do not live close to each other, travel expenses may also be part of the child support calculation or split proportionately.
There may be required payments in addition to child support owed by each parent. For example, medical expenses such as copays and other out of pocket costs are generally split in proportion to income.
Taxes as they Relate to Child Support
Child support is not taxable to the parent receiving it, nor is it tax deductible to the parent paying it. It is important for each parent to consider the tax consequences of other items related to child support and consult a tax expert regarding these issues. Some parents may receive a tax credit for payment of daycare expenses. It is important to consider such tax credit along with how it will adjust child support depending on which parent is responsible for the costs.
The child support statute also states that parents are to split dependency exemptions for tax purposes in proportion to income. It is generally advisable to be very clear as to who is claiming what child in what year so there are not disputes in the future regarding this issue.
Modification of Child Support
Child support can be modified numerous times until the children are emancipated. If there is more than a 10% change in support due, there is a rebuttable presumption that child support must be modified. For example, if one parent owes another $400 per month, if a new calculation would result in a $441 payment each month, than the court will likely modify child support accordingly.
Child support may be raised or lowered several times until the children are emancipated, adjusting to new parenting plans, changing incomes of parents, termination of daycare, and changes in health insurance costs. To determine if a modification is necessary, it may be necessary to consult with an attorney.
Emancipation of Children
Generally children are considered emancipated at age nineteen, and child support terminates automatically upon emancipation. A child may also be considered emancipated if he or she gets married or enters active duty military. There may be other circumstances where a child is considered emancipated before age nineteen. Child support may extend beyond the age of nineteen if a child is determined to be mentally or physically disabled, or if he or she is still enrolled in high school.