In cases where parents are divorced or not married and living separately, most parents are familiar with the idea of child support (i.e., one parent paying money to the other parent for the benefit of the children.) However, calculating child support and what goes into the calculation is a mystery to many.
In Tennessee, in order to determine the correct amount of child support, one uses a Child Support Worksheet (“CSW”). The CSW is determined by plugging specific numbers into a child support calculator.
The child support calculator is available online and can be found on the website of many court clerks. Primary items considered in determining the child support amount are inserted at the correct place in the CSW to come up with the child support payment, are as follows:
- The number of days, out of a 365-day year, each parent has custody of the child. Custody of the child used to be limited to the person who had the child overnight. It can be more nuanced than that now. The person responsible for the child for most of the hours on a particular day may treat that day as theirs for parenting time purposes. Therefore, each parent must determine how many calendar days are theirs and how many calendar days are the other parent’s out of a 365-day year.
- The “gross income” of both parents. Gross income is defined broadly; for details, see our prior blog post, which can be accessed here. Suffice it to say that gross income means just that – the total amount of income, from virtually all sources, which each parent receives, including salary, bonuses, overtime, gifts, retirement income, pensions, interest in dividend income and even inheritances, prizes and lottery winnings, among other things.
- The amount paid for the child or children regarding health insurance. For example, if someone pays $500 per month in health insurance premiums for themselves and their three children, they must ask their employer or health insurer what part of that premium constitutes payment for the children. Only the portion of the health insurance premium for the children is considered.
- Reasonable after-school care costs for the child or children.
The above figures must be determined and inserted into the child support calculator before the correct amount of child support may be ascertained. Once the numbers are known, however, they may be plugged into the child support calculator using the CSW, and it will then generate a child support figure that one parent owes to the other.
Often, the most significant determinative factors regarding child support involve whether there is a large difference in gross income between the parties and whether there is a large difference in the number of days each party has custody of the children. Using different numbers in the child support calculator based on estimations, can give someone a good idea of what child support may be in a case, and it is free to go online and check.
Making sure one has the correct numbers and the correct information to insert into a CSW, however, is critical in determining the correct child support figure. Making false assumptions and putting in incorrect numbers will result in an inaccurate figure.
Another important child support factor is taxes. Currently, child support is taxed to the person who pays it. Previously, it was taxed to the recipient, but that law changed several years ago. Therefore, considering the tax implications of child support payments is also very important in determining its bottom-line financial effect.
The child support calculation presumes the person who has the children most of the time will be able to claim the children on their tax return as a deduction in Tennessee. This means the person paying the child support, if they are not the primary residential parent, may be taxed on the money they pay in child support and unable to claim the children as a tax deduction. The tax deduction issue, however, may be negotiable in a divorce case.
Understanding the law in this area can be very important in determining the correct numbers and reasonable financial expectations about what will occur with child support and in knowing what one may and may not negotiate regarding child support and its financial effects. Contacting an attorney with experience in the area can help ensure one is accurately informed and has the best information and strategy possible.