Divorce is extremely stressful and often overwhelming. Divorce is arguably the most emotionally taxing event that a person can endure in his or her lifetime. When a child or children are involved, multiple additional stressors and complications arise. In our practice, we often find that discussing how assets will be divided and how post-divorce “pay-outs” will be distributed adds stress and confusion.
Child support, relatively speaking, has elements which are more straightforward and mathematical under the California Child Support Guideline. This article will provide the reader with simplified information on how the California Child Support Guideline is used to calculate child support and thus help reduce the stress involved in the divorce or separation process.
The first step in a calculating child support under the California Child Support Guideline, is to calculate each parent’s “net disposable income.” Under the California Child Support Guideline, the court calculates the amount of child support to be paid by considering four variables. Calculating each parent’s net disposable income is the first and second variable of the four variables.
Under the California Child Support Guideline, the court will inquire about the father’s net income which includes money from all sources, regardless of whether the type of money is reported under state or federal law as “taxable income.” Net disposable income is similar in concept to “take-home pay.” Understand that the court calculates this amount somewhat differently than an employer typically calculates for pay roll deductions; however, many of the deductions do overlap.
The court will begin calculating the amount of child support under the California Child Support Guideline by starting with the father’s total income. This figure is reached by adding the numbers from a variety of sources. Examples of income include wages from a job, tips, commission, bonuses, unemployment benefits, pensions, interest, dividends, and rental income.
Once this figure is identified, certain items will be deducted from the father’s income, such as taxes, mandatory union dues, mandatory retirement contributions, health premiums, and costs of raising a child after a divorce or separation, to name a few.
The remaining amount is considered as the father’s net disposable income. Variable One of calculating child support under the California Child Support Guideline at that point is done.
Variable Two in calculating child support under the California Child Support Guideline is determining the mother’s net disposable income. We use the same method as with the father.
Variable Three in calculating child support under the California Child Support Guideline involves the judge inquiring about each parent’s federal tax filing status. There are four possible statuses: single, head of household, married filing separately, and married filing jointly.
Clients commonly ask if there are benefits to filing with a certain status. Head of household status may provide certain advantages, including lower taxes. To qualify for this filing status, the parent must be either divorced or married, but filing separately. The parent must also be separated from his or her spouse for at least 6 months and have at least one child living with him or her for more than 50 percent of the time. Parents who have never been married and who have a child or children for more than 50 percent of the time can also qualify to file as head of household.
If custody is literally 50-50, technically neither parent can file as head of household. When two or more children are involved, it could save tax money for both parents to create a custody order in which one parent has just over 50 percent physical custody for one child and just under 50 percent physical custody for the other child. The benefit of this is that each parent can then claim as head of household which may, depending on the parent’s income amount, reduce the amount of money paid to the government as a result of exclusions, deductions, and/or credits.
Variable Four and the final variable in calculating child support under the California Child Support Guideline is the “time share” or the percentage of time the child spends with each parent. In plain terms, the more time the child spends with the parent that is considered the “lower-time parent,” or the parent that typically has a lower percentage of physical custody, the less child support will be ordered by the court. The court may investigate to confirm that the motivation for spending more time with the child is in the best interests of the child and not primarily with the intent of the parent to either obtain or to avoid paying child support.
If you are using an online calculator to obtain an approximate estimate of child support under the California Child Support Guideline, keep in mind that, depending on the calculator used and the figures entered, results may vary. Only the court can determine the actual amount that will need to be paid; the online calculators are simply a tool to provide a “ballpark figure.”
At Klueck and Hoppes APC, we are experienced family law attorneys who can assist you in the process of resolving child support disputes under the California Child Support Guideline. Structuring your divorce to maximize tax benefits and minimize tax consequences often requires cooperation from both parents. As such, we believe in the use of collaborative divorce and/or mediation to reach a resolution whenever possible. In the end, the child will benefit as a direct result of ensuring that your hard-earned dollars go toward your child’s care, instead of to the government.
To schedule a reduced-rate, flat fee consultation with our firm, please call our office at (619) 577-4900. We are here to help you.