Determining Income for the Purpose of Child Support
Oftentimes a parent’s income and expenses go far beyond a paycheck and groceries. Factors ranging from investments to medical expenses to bridge tolls can influence a parent’s overall income for the purpose of child support.
It may surprise you to learn that some of a parent’s most basic expenses are not considered income deductions when it comes to child support. Food, clothing, housing, and a vehicle are indeed basic necessities, but the court considers them discretionary expenses because there can be a lot of variation within those categories.
Some parents choose to spend more to have a nicer vehicle, bigger house, or other discretionary expenses they choose to support their lifestyle. Rather than delving into all the reasons a parent might offer for needing a Land Rover over a Hyundai, the court puts all of these basic expenses aside to level the playing field.
When is Money Not Considered Income?
As not every expense is considered a deduction, not every source of money is considered income for the purpose of child support. Life insurance, income resulting from a loan (assuming the loan has not been forgiven), and equity in a primary residence are not considered income.
A parent may also already be receiving child support from another relationship. It is presumed this money will be spent on the other children and is not considered income.
What May Be Deducted From Gross Income?
When considering gross income, the court understands that the parent doesn’t have access to the entire amount. Mandatory deductions such as taxes, FICA, union dues, retirement contributions, and health insurance premiums are deducted from the parent’s pay before the parent can use these funds to support the children.
Court ordered child or spousal support related to a different relationship is also deducted from the parent’s gross income, as is the cost to support other natural or adopted children who live with the parent.
Certain employment related expenses may be deducted from net income for the purpose of child support. If a parent’s employer doesn’t reimburse the parent for necessary costs like parking, tools, uniforms, and gas, the court may deduct these expenses.
Even if these costs are not allowed under the tax code, they are considered necessary in order for the parent to be employed, which is in the best interest of the children.
Some parents have unusual hardships that are not considered by the standard child support calculator. These are things like unusually costly medical conditions and catastrophic losses.
A parent may argue that a particular expense is a “special circumstance” if it is very expensive and falls outside the generally recognized types of hardships. An experienced attorney can help craft a case for deducting unusual expenses so they do not create a serious hardship for the parent.
Determining a parent’s actual income for the purpose of child support can be a surprisingly complicated and time consuming process. An experienced attorney who reviews your case can identify potential income, deductions, hardships, and other circumstances the court should consider in determining income for the purpose of child support.
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