While each of the 50 states is under a federal mandate to enforce specific child support guidelines, these guidelines can vary widely from state to state. They are reviewed every three years, to be updated if it is deemed prudent or necessary (though changes do not always result). Our guidelines here in Massachusetts were recently reviewed, and updated as of August 1, 2013.
Massachusetts child support guidelines are currently based on several key factors:
- Gross income of both parties
- Child care costs
- Health care costs (including dental and vision) for both the child and the parents
- Other potentially applicable situations, such as whether one party is already paying child support to children from a previous relationship
While these guidelines are standard, they can take unique circumstances into consideration as they are applied to each individual case. The general formula calculates a number that becomes the weekly child support amount. While it is often the case that one parent earns more than the other, under Massachusetts law both are still responsible to pay for their child’s needs. The custodial parent usually receives the child support, regardless of who the higher earner is. It is possible, though infrequent, for the higher earner to pay child support even if he/she is the custodial parent. The object is to provide for the needs of the children in both homes.
Child support orders can be modified in the case of a) emancipation of a child, or b) a significant change of circumstances, such as a variation in income of generally 20% or more by either party, or c) whenever there is an inconsistency between an existing order of child support and the guidelines amount.
There are a few basic terms that should be explained:
- Child support orders are intended to cover a child’s “basic needs”. The constitution of what is a “basic need” can differ from family to family, depending upon standard of living. In almost every case, a basic need includes food, clothing, and a roof over one’s head. Beyond that, the court can determine what is essential for that particular child. The “basic needs” for the child of a wealthy family would not necessarily be equivalent as for the child of an impoverished family.
- Emancipation is defined in Massachusetts as when a child reaches age 18 or graduates from high school, unless the child is a full-time student enrolled in a post-high school program. If the child is principally dependent upon his/her parents, the legal age is 21. (This is not the case in all states.) In most cases, a full-time student in Massachusetts is not considered emancipated until graduation or age 23, though this does not include a student enrolled in graduate school. If a child over age 18 is working full-time, is married, or enlists in the military, s/he is considered emancipated, even if s/he is a full time student.
General Guidelines Alterations
There are occasions when the way in which standard child support guidelines are applied might be altered, for tax purposes or otherwise. Here are some examples:
1) If a child spends approximately the same amount of time in both households, child support guidelines are not strictly applicable when determining payment amounts and there is a bit more math involved. There is a process for calculating child support in those situations that establishes the support as the difference between the amounts each would pay the other if one was primary caretaker. Remember that child support paid by one parent to the other is often still appropriate even when the time is shared equally so a child can be equally comfortable in both households. And, if the child spends less than 50% but more than one-third of the time with a parent, there is a formula for calculating support in those instances. Unfortunately, sometimes these adjustments to the basic guidelines have caused some parents to push for more custodial time than they would have otherwise, simply to get out of having to pay more child support. This results in less than ideal parenting in certain cases.
2) Child support is not considered to be income to the payee, nor is it a deduction for the payor (i.e., the payor is still taxed on the income prior to making the payment). Alimony is considered to be both income for the payee and a deduction for the payor. The different tax treatment provides opportunity, through negotiation, to characterize payments in order to minimize tax consequences.
In my next post, we’ll discuss some common misconceptions about how child support works, and shed light on what the realities actually are.