Due to the existence of mandatory guidelines in every state, the determination of child support is viewed by many as a perfunctory exercise. And it often is, in simple scenarios, such as when both parents are W-2 employees. While the child support formula (or worksheet) may be straightforward, ambiguity can arise in the inputs to the formula--specifically, what constitutes income and how it is measured. Although many states have proactively reviewed and amended their guidelines to address such ambiguities, others continue to operate under generalities that can lead to inequitable results in some situations. One such situation that is becoming increasingly prevalent is self-employment income, which includes independent contractors and small businesses. Given the self-determined nature of such income, there is certainly an opportunity (and arguably even a tendency) for misrepresentation. According to recent research, 44 million American workers (28.2%) were self-employed at some point during. We can only expect this to increase in the COVID-19 era as more people seek alternative work environments.
This article identifies and discusses common elements of child support guidelines across the nation, particularly as they relate to self-employment income. The goal is to familiarize practitioners with key issues that may be addressed to a greater or lesser degree in the laws of their home states. Either way, knowledge of the issues is necessary to determine what arguments can successfully be made and how. I begin with a discussion of how income is defined in the guidelines, which is the primary source of disparities across the states. I then describe how the landscape of financial reporting for self-employment leads to difficulties in quantifying said income, especially with regard to assessing the legitimacy of expenses. The authority of tax returns with regard to self-employment income is then discussed, as well as the burden of proof for any deviation therefrom. Finally, I identify other provisions of the guidelines that may be relevant to the determination of self-employment income. Throughout the article, I highlight the law in my home state of West Virginia.