August is National Child Support Awareness month. We tackle this complicated subject on the August 17th edition of Split Decisions, our weekly divorce radio hour. Below, the attorneys at FORESTER PURCELL STOWELL PC provide a sampling of common myths and misperceptions regarding child support.

 

 

neil-forester

NEIL FORESTER

Sometimes child support payers overlook the need to divide up a child support payment between multiple children. Support is supposed to pay kids’ overhead expenses (room, board, clothing, etc.), and in families with more than one child, those expenses are shared proportionally. So child support orders are also proportional. It is not as easy as dividing the support equally among the children – the guideline support calculation will actually weight the support so that the youngest child has the most support allocated to her, and the oldest has the least. This recognizes that even though a child has turned 18 and is no longer eligible to receive child support, the fixed expenses remain largely the same. The mortgage is the same, utilities are not too much different, and so on. If the support award is not properly “allocated” between the children, when the oldest child ages out of the support award, the support order will not change. It will continue to be the same amount regardless. So if more than one child is receiving the child support, you must be careful to ensure that the order reflects a proper allocation between the children to prevent overpayment of support later.

 

MICHELLE STOWELLmichelle-stowell

Many of my clients are under the false impression that the higher their monthly expenses, the less they will pay in child support. Child support is based on your net income – i.e. income available after taxes have been paid – not on monthly expenses. This means that the more tax deductions you have, the more you will pay in child support (or, conversely, the less you will receive in child support).  My clients are often surprised to learn that after buying a new house with a large monthly payment, their child support goes up. This is because along with that new house comes the tax deductions for property taxes and interest payments. The program that calculates child support looks at these additional tax deductions as you receiving additional income. Similarly, if you contribute to a 401(k) – which is in pretax dollars – your support payment will also increase because the program views these contributions as tax free money (even though it really isn’t). The bottom line is this – the more tax deductions you have, the more you will pay (or the less you will receive) in child support.

 

Jenny Bain 220 x 220 Website 386JENNY BAIN

I see a lot of sticky situations arising from one parent owning their own business or being self-employed. It becomes difficult to identify the parent’s true income, especially if they are dishonest, as is unfortunately often the case. There is no one to challenge a parent’s income except for the parent contesting the level of support. The burden of proof is on that parent to dispute what the other parent states is their income, and they are of course in the worst position to gather information. The only real option is to engage in extensive discovery, sometimes requiring forensic accountants to analyze business arrangements. Many don’t have the funds necessary to hire such expertise. This can lead to inadequate support orders, and is often one of the most disheartening things to explain to a parent who is not receiving enough support or is over-paying support, without relief in sight.

 

matthew-purcellMATT PURCELL

Child support is always modifiable if there is a change in the parties’ income or parenting plan, the two primary variables used by child support calculators. Child support amounts that are determined by using the guideline formula are based upon income and parenting time at the time the order was made. The order doesn’t change automatically, but if one parent seeks a change, it will be considered by the court. I had a client who was astounded to learn that he would have to pay more in child support with his new job that more than tripled his prior salary. He thought, as many still do, that when the order was made, it was set in stone.  The reality is that if you make more money, or less, or you spend more or less time with your kids, the court can change child support accordingly if one of the parents asks for it.

 

Kristin-Capritto-Attorney-ThumbnailKRISTIN CAPRITTO

For income tax purposes, spousal support is deductible for the payor spouse, and taxable for the recipient spouse. However, child support, unlike spousal support, is neither deductible for the payor parent, nor taxable as income for the recipient parent. If the marital settlement agreement provides for “family support” without designating a specific amount of that “family support” as child support, then the entire amount payed for “family support” is deductible by the payor parent/payor spouse, and is taxable for the recipient parent/recipient spouse. Be careful how support is characterized in your marital settlement agreement, as it may have significant tax consequences.

 

Based in Folsom, California, Forester Purcell Stowell PC can be reached at info@foresterpurcell.com or 916 293 4000. This information is general in nature and should not be construed as legal advice.

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