Deductions in the Child Support Calculation
The first step in the California child support calculation is determining gross income. For purposes of child support, gross income is defined under the law as income from whatever source derived, except for income that is legally exempt from the child support calculation. (See our article on excluded sources of income to learn more). Deductions are then subtracted from the gross income figure in order to arrive at the net disposable income of a parent. Thus, it is important to properly consider deductions and excluded income in order to arrive at the correct figure for the parent’s net disposable income.
Deductions from Income
After computing the annual gross income of a party, the court will then deduct from that figure to arrive at the parent’s annual net disposable income. The following are deductible from the gross income of a parent:
- Federal and state income taxes
- FICA Contributions
- Mandatory union dues and retirement benefits required as a condition of employment.
- Health insurance premiums for both the parent and any child the parent has an obligation to support.
- State disability insurance premiums
- Child and spousal support actually being paid under an existing court order, to anyone whose support is not a subject of the present case.
- Job-related expenses
- Hardship deduction
The amount deducted for taxes must be taxes actually payable after considering appropriate filing status and all available exclusions, deductions, and credits. The number may differ significantly from the taxes withheld on a party’s pay stub because people often under-withhold or over-withhold taxes. In cases like these, it’s best to consult with a child support lawyer.
Job-related expenses include costs which are necessary for employment purposes such as expenses for uniforms and tools. It can also include other incidental expenses related to employment such as transportation costs and parking fees.