What Deductions Are Made from Gross Income for Child Support Purposes?

Child support is a vital decision in family law matters. A court examines the income of both parents when determining child support payments.

Income considered will be each parent’s annual gross income; however, some items and expenses can be subtracted for the purpose of calculating child support. California Family Code § 4059 lists these possible deductions.

For instance, income tax liability is deducted from annual gross income. This does not mean that taxes withheld from a parent’s paycheck will be deducted. The income tax liability is the tax an individual is responsible for paying to the IRS or the state after completing his or her annual tax return filings.

Although income tax withheld from one’s paycheck is not deductible from annual gross income, Federal Insurance Contributions Act (FICA) withholdings are deducted.

Other work-related expenses may be deducted from annual gross income for the purpose of determining child support. When this happens, work-related expenses are reviewed to make sure that the expenses were truly necessary or required. Such deductions can include mandatory union dues, mandatory retirement benefits, and/or health insurance premiums (including health insurance premiums for any children that the parent is required to insure).

If a parent is responsible for a child or children of a previous relationship, any child support payments that are made on behalf of that child may be deducted from the parent’s annual gross income, as well. It is important to note that only payments actually made can be deducted. Child support payments may have been ordered but not actually paid—if this is the case, that amount will not be considered deductible from income.

In some cases, a parent can request a deduction for a hardship. If the court determines that a hardship is applicable, the approved calculated amount of the hardship is deducted from that parent’s annual gross income.

If you need assistance in a family law proceeding, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.

What Is Included in Income for the Purpose of California Child Support?

The state of California takes into consideration the income of both parents when determining child support payments. Sources of income will vary from person to person.

Section 4058 of the California Family Code provides that annual gross income can come from a combination of “commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding.”

Other sources of income will include that from a business owned by the individual after subtracting the expenses of the business from the revenue. A court may also consider employee benefits or self-employment benefits as part of a parent’s annual gross income if those benefits come in exchange for—or at the expense of—potential income for the receipt of those benefits.

There is income that is not taken into consideration for the determination of child support, as well. Child support received to benefit children from a previous relationship is not considered income for determining support for the child(ren) of the current relationship. Other items that are not considered include public assistance benefits received based on need.

Sometimes, a parent will attempt to avoid being ordered to pay child support by quitting his or her job or taking a lower-paying position or an intentional pay cut. When a parent takes these steps to avoid paying child support, the court may take into consideration the income of that parent’s new spouse or even a new partner to whom the person is not married.

A court may also hold such a parent accountable by evaluating that parent’s income potential. The court can look at how much income that parent could have made. This is known as imputing income.

If you want to learn more about child support matters in California, contact the attorneys at the Law Offices of Judy L. Burger. We can help. Call us today to make an appointment: (415) 293-8314.