Net disposal income for child support purposes in California is subject to some mandatory and discretionary considerations.
In this article, we highlight the most common issues involved.
When you hire a divorce attorney in a case that involves child support, the question of how child support is calculated is often answered by referring you to a computer program that does the work for the attorney and the judges.
But for some divorce clients, it is not enough to simply point to a program. There may be specific issues with your income and deductions that are different than others.
Let’s assume we have your gross income already calculated. Now, we need to know what your “net disposable income” for child support may be and how it is calculated. We cover the most common issues here. This article is not a substitute for a specific analysis of your facts after retention of an experienced lawyer and, when necessary, a forensic CPA.
1. Federal and State income taxes and impact on net disposal income for child support
This is the income taxes you pay. Your family law attorney will explain that the computer program will make this calculation for you but it is important you understand that this tax deduction from your income or the other parent’s income must be consistent with the way you and the other parent each file (married filing jointly, married filing separate, single, etc.) and the number of dependents each of you claim.
The computer program should not list a tax status for either of you that is different than what is actually used. Also, if one parent is actually not paying his or her taxes, that fact may be relevant and your Orange County divorce attorney could argue to the court that there should not be any deduction for taxes because they are not being paid. This can be tricky however because, eventually, the taxes will likely be paid.
2. Health insurance premiums decrease gross income for child support purposes?
Actual deductions for health insurance premiums (group or private) can be deducted from gross income. These deductions are for the parent and any children that parent has the obligation to support. This includes State disability insurance premiums. Your divorce attorney will often point you to your paystub to determine this deduction.
3. Retirement benefit deductions and union dues as deductions toward net disposable income for child support?
Only “mandatory” deductions for retirement benefits – which commonly include 401(k) and pensions – and union dues can be deducted by the Orange County divorce attorney when determining net disposable income. Voluntary contributions to dues or retirements are not deductible.
4. Actual child support or alimony that is paid pursuant to a court order when calculating net disposable income
This situation arises when the parent has a support obligation to another child or children or another spouse pursuant to a court order.
What sometimes becomes complicated is when a parent supports another child but that support is not pursuant to a court order. Your Orange County divorce attorney will work with you to determine whether the support to the other child exceeds the actual “guideline” child support number (to make sure that the other child or children are not getting a windfall at the expense of the children in your case), that the other children do not reside with that paying parent and the other child is also a natural or adopted child of that parent.
5. Job related expenses and how it affects net disposable income for child support purposes
It is not common that a parent receives a child support deduction for job related expenses but if the parent that seeks the deduction can show the expenses are reasonable, necessary, of a benefit and should in the interests of justice be deducted, the family court will consider it. It is important that your divorce attorney be provided with a clean paper trail of these expenses to make sure they are actually being incurred and are not manufactured or exaggerated and, just as important, are not reimbursed.
Do not confuse this issue with business expenses for a self employed spouse and which are deducted to determine the income of the self employed spouse. That is a complete different issue.
6. Hardship deductions and their discretionary application to child support cases and net disposable income
These fall into several categories.
a. Extraordinary health expenses that a parent is financially responsible to pay.
b. Uninsured catastrophic losses.
c. The least common and difficult to receive “minimum basic living expenses” of the parent’s children. The children would have to again be natural or adopted, from another marriage or relationship and which the parent has a legal obligation to support. Step children are typically not factored into a deduction unless the income of the step-parent’s new spouse or unmarried partner is factored into the child support calculation. This scenario is rare. Hardship deductions can be difficult to prove and clear evidence is necessary.
Are you the parent that seeks child support? Are you the paying parent?
Our divorce attorneys are experienced in handling child support matters for married, divorced or unmarried parents and have successfully represented fathers and mothers with child support issues for many years.
Contact our experienced divorce attorneys for a consultation. We will answer your questions and get you on the right track.