Calculating Child Support Factors

The starting point for the calculation of child support is the previous year’s tax returns. This is simply the starting point, there are many factors which may lead the Court to enhance or adjust your income when determining the proper amount of child support. Courts will also look to your most recent pay stubs. The Court may look at the most recent pay period or the year to date figures. Why? There may have been a dramatic change in your income since the filing of your latest tax return. It is easy to foresee two quick examples where using the last tax return will provide a child support award that is inadequate or unjustified. If you lose your job after your tax return, clearly the award based on job you no longer have will be unduly burdensome (more on this later). If you receive a significant pay raise after your taxes are filed, you may not be paying enough.

When calculating child support the Court will investigate to determine whether or not the non-custodial parent receives a bonus that is not reflected on the tax returns. Such bonuses may be reflected on pay stubs or in an employment contract. The Court will include these bonuses to the child support calculation. Other factors the Court will consider include but are not limited to: (1) investment income; (2) workers’ compensation benefits; (3) disability benefits; (4) veteran’s benefits; (5) pension and retirement benefits; (6) fellowships and stipends; and (7) annuity payments. A personal injury settlement may also be considered when calculating child support payments, especially if part of the award was granted for future and/or loss wages.

Imputation of income: I began this topic with what happens if you lose your job and thus your tax returns may not accurately describe your income. While true, the Court will look into the facts and circumstances of the loss of income. If you lost your job through no fault of your own, i.e. you were terminated as a result of cut backs, or your boss simply let you go, the Court will take that into consideration when calculating child support. If however, you purposefully lost your job, i.e. you quit or you took another job to lower your income and thus lower your child support payments, the Court may impute income to you. In other words, you were making $100,000.00 and you quit your job and now you are making $50,000.00. If the Court determines that you did this to lower your child support obligations, the Court may award child support award based on the $100,000.00 salary regardless of what you are currently earning. This also comes into play when the non-custodial parent owns his/her own business and the tax returns do not adequately reflect the true income to be used in the calculation for child support.

LEARNING POINT: The tax return is simply the starting point in the child support calculations. There are many considerations that must be taken into account to determine the proper child support award. Contact us to help guide you through this process.

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