Divorce: Calculating Child Support FAQ

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  • Can the court add the money that I receive from a trust to my regular income in calculating the child support that I pay?

  • I'm on social security disability. How will getting those benefits affect my child support obligation?

  • My ex owns his own business and says that his tax returns don't reflect his "true" income. If child support is decided based on income, what will happen here?

  • My wife is telling me that my freelance gross income will be included in child support computations, but that I won't be able to deduct any of my business expenses. Is this true?

  • Will things such as 401(k) matching funds and stock options be included in my "gross" income for child support purposes?

  • I receive some money from my brother's rental property. Can the money that I get from my brother's property be used in calculating my support obligations arising out of the divorce?

  • I will be inheriting $100k from my father's estate. What will happen to my support obligation?

    Q: Can the court add the money that I receive from a trust to my regular income in calculating the child support that I pay?

    A: Such money will likely be considered "income" for support purposes. However, if it isn't a recurring payment, the law usually takes that into account. Possibly the order will only be modified for a certain period, like the current year.

    Additionally, in most states the court has the discretion to go outside the normal support calculation when the parent who must pay support has a large amount of assets and not much income. Support can be calculated from the assets.

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    Q: I'm on social security disability. How will getting those benefits affect my child support obligation?

    A: In the majority of states, a disabled parent is entitled to a full credit in his or her child support obligation for social security payments received by a minor child because of the parent's disability. In other states, the amount of the benefit received is deducted from the total child support of both parents, and the remainder of the obligation is then divided between the parents in proportion to their incomes.

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    Q: My ex owns his own business and says that his tax returns don't reflect his "true" income. If child support is decided based on income, what will happen here?

    A: Your husband and his business are obligated to report accurate income to the IRS on tax returns and any other filings required by the government. If the tax returns don't reflect his accurate, "true" income, he may have more problems than just the calculation of child support. Most states' laws require courts to consider income from all sources when calculating child support. This can include income from wages, interest, dividends, and other business sources.

    Another consideration here is that you may have participated in some tax fraud while married to this guy. If he was skimming profits while you were married and you knew it, and you signed the joint returns, you may have some problems claiming he actually makes more income at this time. If that's the case, you really should consult with a local attorney.

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    Q: My wife is telling me that my freelance gross income will be included in child support computations, but that I won't be able to deduct any of my business expenses. Is this true?

    A: The answer to your question will depend on your state's child support laws. In Ohio, for example, standard guidelines are used for calculating child support. Ohio's guidelines allow for the deduction of necessary business expenditures from a self-employed individual's income. The guidelines don't specify any other category of business deductions.

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    Q: Will things such as 401(k) matching funds and stock options be included in my "gross" income for child support purposes?

    A: States differ in their definitions of "gross income" and what might be included in the computations to determine child support.

    401(k) deposits might be considered income, or they might not. Your employer's matching funds are more than likely not going to be included, but it depends on state law.

    Stock options, however, may be included in computations. Stock options allow you to defer significant income into the future, thereby avoiding having the support obligation apply to the income. State law might easily include such benefits.

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    Q: I receive some money from my brother's rental property. Can the money that I get from my brother's property be used in calculating my support obligations arising out of the divorce?

    A: If the money you receive from your brother's property is properly reported as income on your income tax returns, then it should be considered in the computation of your child support obligation, and may also figure into other obligations such as alimony.

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    Q: I'll be inheriting $100k from my father's estate. What will happen to my support obligation?

    A: State support laws usually have provisions for sudden, one-time injections of income. The court will possibly have discretion to award a lump-sum amount under certain conditions, or might do something different. For example, if your state's percentage for one child is 20%, the court might take $20k and just have you pay it over the rest of the child's minority. If there is 10 years left on the obligation, that would be an extra $2000 a year, or $167 a month.

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