How Child Support Works
Whether you are the recipient or the giver, child support can be confusing to understand. One common question is, “Is child support taxable?” This, and other questions, can be answered by a qualified lawyer. Here is a look at what you need to know about child support and the factors influencing it.
Child Support and Taxing Interactions
On the receiving side, child support is not part of taxable income. This can be a relief if such funds would change a person’s tax bracket. Since this money is already going to be taxed on the giver side, taxing the recipient would be double-taxing. Speak to your lawyer if there are other questions you have about received child support and your taxes.
For whoever is giving child support, a gross income calculation should ignore money sent for child support. This income would have been used to cover expenses associated with raising said child or children, so paying it as legally required support does not change gross income.
Determining Child Support Amounts
There are multiple ways child support can be calculated, and they vary depending on whether both the custodial and non-custodial parent work plus other factors. The income shares model assumes both parents work and provide for the child, so the non-custodial parent is not required to pay all expenses for the child. It could be they cover a certain percentage which is then deducted from their income.
There is also the percentage of income model which takes a flat percent, such as 25 percent, of the non-custodial parent’s income. Child support lawyers can help you determine which model is best for your situation. You can also learn how child support amounts may change over time from a qualified legal consultant.
The Result of Joint Custody
If you have joint custody, that does not always mean child support will be a nonissue. Typically, if both parents have the same income and spend the same amount with a child, that is the only way to avoid child support. Otherwise, if one person spends more time and the other makes more money, child support payments will be involved.
Child support is sometimes difficult to understand, so experienced child support lawyers can help demystify the process. For questions such as, “Is child support taxable?” a lawyer can provide the answer and explain why the law works that way. If custody rights are going to be discussed soon, get a qualified lawyer who can tell you what to expect and help you get the best outcome for your situation.