One of the most common questions that people have related to divorce is how much they have to pay in child support. In California, the uniform California Child Support Guidelines are typically used to set support. These guidelines lay out a mathematical formula that the must judge use in calculating child support, except in unusual circumstances. That formula takes into account the following factors:
· The monthly disposable income of the high-earning parent (HN);
· The amount of time the children spend with each parent (%H);
· The total monthly disposable income of both parents (TN);
· A factor based on the number of children (Z); and
· A factor based on the percentage of the parents’ income that is to be allocated to child support (K).
Written out, the formula looks like (Z)(K)(HN-(%H)(TN)). Fortunately, a computer is used to make the calculation. A free child support calculator is available from the California Department of Child Support Services.
Disposable Income Explained
The formula starts with the monthly disposable income of the high earning parent. The court calculates disposable income by starting with the parent’s annual gross income and then subtracting from it certain expenses. These expenses include:
· State and federal income tax liability,
· FICA taxes,
· Contributions to mandatory union dues and retirement benefits,
· Health insurance premiums for the parent and any children that the parent has an obligation to support,
· Some other child support obligations,
· Necessary job related expenses, and
· Certain hardships that the parent may be experiencing.
After taking these deductions, the result is annual disposable income. Divided by 12, we find monthly disposable income.
California courts generally use the same definition of “income” as the IRS does when determining taxable income. In fact, a parent’s last filed tax return is presumptively correct for purposes of determining his or her income in a child support case. The presumption can be overcome when the evidence shows that the tax return is not correct. Sometimes a California court will use non-taxable income, such as regular gifts to one parent, to increase that parent’s income for purposes of setting child support. Legitimate tax deductions, like depreciation or some business expenses, might be added back to the parent’s taxable income when setting child support also. A California court will not overlook any source of income when it comes to child support, since the state has a strong public interest in ensuring that children have sufficient support to meet their needs according to the lifestyle of both parents.
Exceptions to the Formula
The court also discretion to modify the guideline child support amount in limited situations, like when a parent has extraordinarily high income, a child has special needs, or there are travel expenses related to visitation. It is somewhat rare for a California court will deviate from the guideline — in other words, the guideline amount will be used by the court in most cases.
However, there are times when the guideline amount will clearly exceed the reasonable needs of the child. There is no maximum amount of child support in the guideline. The child support amount produced by the guideline increases according to the high-earning parent’s income, without any cap. At some point, the formula produces an absurd amount of child support, allowing the court to set child support according to the reasonable needs of the child. If a parent is making over $2 million per year, a Los Angeles Superior Court will most likely find that the parent has extraordinary high income and deviate from the child support guideline. The next step will be to determine “reasonable needs” of the child, which will depend on the lifestyle of the high-earning parent. A child has the right to live at the same lifestyle, so the court will consider the amount of child support it would cost to replicate a similar lifestyle for the child.
If you are concerned the amount of your child support obligation or benefit under California law, please contact the experienced divorce lawyers at Walzer Melcher LLP to make sure that your rights are protected.