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September 12, 2012

Child Custody and Support

Setting Guidelines for Child Support

What is considered income?

Most states look to the parents’ net income, although some states use the parents’ gross income.

Gross income means the parents’ income from all sources, including wages and investments, with no deductions for taxes or other expenses. Non-wage benefits a parent receives from an employer might be counted as income. For example, military housing allowances usually are counted as income when determining child support. Use of a company car for personal business also might be counted as income.

Net income means gross income minus federal and state income taxes, Social Security tax, Medicare tax, and health insurance. Some states will allow other deductions, such as mandatory retirement contributions, obligations of support to other families (other than the family whose support is currently at issue), and payment on debts that were incurred during the marriage for the benefit of the family.

For self-employed persons, the determination of income may be complex. Courts will allow deductions of reasonable business expenses before determining net income. But courts may disallow unusually high business expenses and depreciation that reduce income artificially without hurting the parent’s cash flow.

>>How are child support guidelines set?
>>What is considered income?
>>Can a parent be forced to pay child support?
>>What happens when the parents share custody?
>>Must the noncustodial parent pay support if the child is with him or her for summer vacation?
>>Who pays for college expenses?

Practical Law Home | Child Custody & Support Home | Deciding Factors in Awarding Child Custody
Issues Surrounding Visitation | *Setting Guidelines for Child Support*
Adjusting Child Custody Arrangements or the Amount of Child Support