How Are Child Support Payments Calculated?
Support for children of divorced parents or parents who are not living together is meant to ensure that the financial needs of the kids are addressed. A divided household or a home where there is only one person responsible for income and child-rearing is likely to see more money challenges.
Child Support Payments Are Not a Penalty or Reward
Understanding the logic behind paying or receiving child support payments is important when it comes time to work out the details. Emotions can run high after a breakup, so it's a good idea to talk about a payment arrangement with a clear head or with proper representation on hand. The best agreements are those that leave both parties feeling as though they were treated fairly and with the best interests of the children in mind. When the person paying sees it as a responsibility instead of a penalty and the person receiving sees the money as an important component in raising the kids, it's properly grounded.
What Are the Criteria for Determining How Child Support Payments are Calculated?
The formulas for figuring out payment amounts vary by state. Some consider the income of both parents, while others only base calculations on the income of the non-custodial parent. Other variables from state-to-state include daycare, school tuition, medical expenses and extenuating circumstances. However, there are basic principles that apply across the board.
- The needs of the child or children.
- The ability of the non-custodial parent to provide their own support.
- The standard of living the child or children would have enjoyed if there were not a divorce or had both parents lived together sharing income.
- Any special considerations the non-custodial parent may have regarding other children. For example, are their other support agreements in place already?
What Factors Change How Payments Are Calculated?
A change in the amount paid for child support can be sought whenever factors used to make the first determinations change. While there are many to consider, here a few of the major ones.
- A change in job or income for either parent
- Serious illness or disability of either parent.
- A change in the circumstances of the children
How Are Child Support Agreements Set Up?
Coming to an agreement over child support can come through voluntary agreement by both parties, through court order or, in some cases, administrative decree. If everyone can come to agreeable terms without a court order, it's good, as long as they still get things down on paper. Today's agreeable circumstances could become tomorrow's argument.
If court or administrative proceedings are necessary, make sure your documentation is correct and includes information on your income, any prior agreements and any expenses related to the children. Go in with reasonable expectations and remember what the objective is -- taking care of those who depend on each of the parents involved.
How Much Should the Child Support Payment Be?
While many mitigating factors make predicting a number hard, there are ranges. Many of the states have online calculators that give an estimation. One of the simplest is the Washington State Calculator. Four quick entries can have you an estimate in less than a minute. For example, if both parents earn $3,000 per month and have two children, both of which are under 18, the non-custodial parent would pay $670 per month in support, according to the calculator.
What if Child Support Isn't Paid?
If the person obligated to pay support fails to do so, there are potentially serious consequences. Wages can be garnished, tax refunds seized, driver's licenses suspended and court action taken. Failing to pay on time can also negatively impact a credit score. Not paying support when due for a child in a different state is a federal crime.
Image courtesy of familymwr
What Are the Tax Consequences?
Some people get confused about how to report or not report support on taxes. The bottom line is that it's not reported -- on either return. The person receiving does not have to claim it as income, nor can the person paying claim it as a deduction.