Business Owners / Self Employed Individuals - Income for Child Support Purposes
If this is your situation the Court does have the authority to look at your operations to ensure that only the necessary and ordinary expenses are deducted before your income is determined. A business owner could attempt to hide income in the businesses through retained earnings, inventory or equipment. If a small business is plowing its earnings back into a growth strategy, rather than distributing them to the owners, you may have a problem with the courts. This can be especially problematic when there is a family owned business and the parent exercises some, but not total, control. Suppose it is Grandpa who has 51% ownership of the business and he is driving the growth strategy and not distributing profits to the 49% owner (the person obligated to pay child support).
Further, individuals in these situations often frequently also have significant in-kind benefits, like a work vehicle, that should be included in their incomes.
Deductions From Monthly Gross Income
If you are making alimony payments, you may deduct that amount from your monthly income. Similarly, child support payments made “in compliance” with a court order for the support of prior children should be deducted from your income. Some courts insist that you be current on that obligation before they will allow you to reduce your income. You also get a deduction from your income if you have children from a previous relationship in your home. In this last instance, they will figure out what your child support obligation would be for that child (or children) and then deduct that amount from your income.
If you have children after your child support obligation is put in place, your subsequent children can be a defense to a Motion to Increase Child Support. A court is not required to allow you this deduction, as the Statute says the court may consider it. If a court does allow it, they will determine what your obligation for that child should be and will then deduct that amount from your income.
- Overview
- Page One - Child Support Statutes and Full-Employment
- Page Two - Self Employed Individuals and Deductions From Income
- Page Three - Calculating Income and Guaranteeing Income
- Page Four - Miscellaneous Income Rulings