The amount of child support a parent has to pay depends on the number of children he or she has, and the amount of money that he or she makes. However, not all income is included in child support calculations. Parents are allowed to deduct certain types of income and expenses from their gross income, which will lower their child support obligation.
Calculating Gross Income
In order to accurately calculate child support, a parent must provide the court with all of his or her gross income and financial resources. A parent’s gross income includes just about any type of income that a person earns, including:
- Deferred compensation (pension plans, retirement plans, stock options, etc.)
- Overtime payments
- Income from second jobs
- Dividends and investment income
- Severance pay
- Workers’ compensation or unemployment benefits
- Social Security or disability benefits
All of these types of income (and a few others) count towards a parent’s total gross income. There are also a few types of income which should not be included in a parent’s child support calculations. These include any income earned by a person’s new spouse or partner, any child support that parent receives from a different relationship, and any types of benefits for needy or disabled people, like food stamps or Supplemental Security Income benefits.
Calculating Net Income
When calculating net income for child support purposes, a parent can deduct several types of expenses from the gross income, including federal income taxes, Social Security and Medicare taxes (also known as FICA taxes), state-mandated insurance for business owners, mandatory union dues, and some types of pension contributions.
In addition, self-employed parents can deduct some business expenses and self-employment taxes from their income. Self-employed parents should expect to justify these expenses to the court by providing the proper documentation.
Outside of taxes, union dues and some business expenses, parents should not expect to be able to deduct any other regular expenses from their net income. For example, parents cannot deduct the cost of uniforms for a job, transportation expenses, or health insurance coverage from their net income.
Calculating Child Support
Determining the proper amount of child support often requires the help of an experienced attorney. At Ashby Law, our attorneys know what type of income should be counted, and what types of deductions you can make from your gross income. We can help you make sure that your child support expectations are fair and reasonable, and that your children are fully supported.