Child Support Calculation

Alimony CalculatorThe Child Support Calculation is a calculation to determine the Child Support that is the legal obligation on the parents to provide support for the children to provide financial support (Food, Shelter and Clothing) after a separation and/or divorce.  

Child Support is an obligation for both parents and not just one.  The initial reasons for the implementation of Child Support is to help keep a similar standard of living to the Child before the Divorce or Separation.

The Child Support Calculation is based on guidelines setup and is the process to determine how much is to be paid by both parents.  These calculations differ from one state to another state.  All states are federally mandated to provide guidelines or lose Federal funds.

TAX IMPACT ON CHILD SUPPORT:  It’s important to know when determining the amount of child support, there is a tax difference between this and spousal support payments.   When a spouse pays another spouse child support, that spouse cannot deduct the payments, however spousal support payments can be deducted by the spouse that is paying.  Additionally, the spouse receiving the child support is not required to claim this as income and therefore no taxes are required on the payments, while the reverse is true for spousal support.

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IRS RECAPTURE RULE:

When calculating Child Support and there is also Spousal Support or Alimony, it is important to know about the IRS Recapture Rule, so you are not subject to this Recapture.  The recapture rule changes the tax treatment of the Spousal Support payments made depending on other circumstances around the payments.  If in the 3rd year the payments of Spousal Support (Alimony) is reduced by $15,000 from either the 1st to the 2nd year or the 2nd year to the 3rd year, and the payment reduction coincide with a child support payment reduction, the IRS will classify the Spousal Support paid as Child Support.  If the spouse receiving the support dies or remarries, the recapture rules do not apply.  They also do not apply if specified in a temporary order.  Lastly, the rules don’t apply if the payments fluctuate due to reasons out of control for the paying spouse, such as a business or other item that the payments were based on.

CONSIDERATIONS FOR DETERMINING AMOUNT AND HOW LONG:

In all states, the amount is based on a specific formula.  You would need to refer to the specific laws of that state to see those guidelines about the amount and length for paying.  In some situations of a joint custody situation, there is an offset child support calculation completed.

Additionally, deviations of the standard calculation may occur based on the following factors:

  • The financial resources of the custodial and non-custodial parent, and those of the child;
  • The physical and emotional health of the child and his/her special needs and aptitudes;
  • The standard of living the child would have enjoyed had the marriage or household not been dissolved;
  • The tax consequences to the parties;
  • The non-monetary contributions that the parents will make toward the care and well-being of the child;
  • The educational needs of either parent;
  • A determination that the gross income of one parent is substantially less than the other parent’s gross income;
  • The needs of the children of the non-custodial parent for whom the non-custodial parent is providing support who are not subject to the instant action and whose support has not been deducted from income pursuant to subclause (D) of clause (vii) of subparagraph five of paragraph (b) of this subdivision, and the financial resources of any person obligated to support such children, provided, however, that this factor may apply only if the resources available to support such children are less than the resources available to support the children who are subject to the instant action;
  • Provided that the child is not on public assistance (i) extraordinary expenses incurred by the non-custodial parent in exercising visitation, or (ii) expenses incurred by the non-custodial parent in extended visitation provided that the custodial parent’s expenses are substantially reduced as a result thereof; and
  • Any other factors the court determines are relevant in each case, the court shall order the non-custodial parent to pay his or her pro rata share of the basic child support obligation, and may order the non-custodial parent to pay an amount pursuant to paragraph (e) of the subdivision.

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