What Counts as Income in North Carolina Child Support Calculations?
As a single parent, having enough money to pay for your children’s needs is a top priority. Many custodial parents depend on child support to make ends meet. But what counts as income in North Carolina child support calculations? How can you be sure you are receiving – or paying – a fair amount?
How is Child Support Calculated in North Carolina?
For most families, the amount of support contributed by each parent is calculated according to set child support guidelines. The appropriate amount is based on each parent’s gross income – the amount paid before taxes and automatic deductions. Then the guidelines apply one of three child support worksheets, based on the parents’ physical custody arrangement:
- Primary custody with one parent
- Joint or shared custody of all children between both parents
- Split custody where some children live primarily with one parent and some with the other
The Guidelines also consider pre-existing child support obligations and each parent’s responsibility to provide for other minor children, work-related childcare costs, and the cost to cover the children on health insurance. Typically, when the worksheets are used, this creates a presumptive child support amount and will become an order unless a judge decides it is not appropriate or one of the parties files a motion to deviate from the child support guidelines.
Child Support in High-Income Families
If the parents’ combined income adds up to more than $360,000 per year, the guidelines no longer apply. In these high-income cases, the court will create a custom child support order based on both parents’ earnings, estates, contributions to childcare and homemaking, conditions, and the child’s lifestyle to date. In these high-income cases, it is especially important to work with an experienced child support attorney to advocate for an appropriate level of support.
What Counts as Income in North Carolina Child Support Calculations?
The NC Child Support Guidelines say income includes “a parent’s actual gross income from any source.” This includes:
- Salary
- Wage income
- Commissions
- Bonuses
- Partner or member disbursements
- Dividends
- Severance
- Rental property income
- Retirement or pension payouts
- Government benefits (SSDI, VA, etc.)
- Unemployment insurance
- Workers’ compensation benefits
- Trust income or annuities
- Alimony or spousal maintenance from someone other than the other parent
The Court will also consider things other than money that a person receives from his or her employer (called in-kind compensation), if those items reduce the person’s living expenses. For self-employed individuals, there are typically many tax deductions that are allowed under the IRS rules, but those deductions are not necessarily allowed for child support purposes. For example, if the business covers cell phone expenses and car payments, those amounts can be added back in to determine the self-employed parent’s income.
What Doesn’t Count as Income for Child Support
Your new spouse or roommate’s income does not count toward your child support. Child support payments you receive for your other children generally don’t count toward your gross income either. In addition, the employer-paid portion of your taxes or health insurance won’t be included in your gross income, even if they appear on your W-2. Perhaps most importantly, means-tested government welfare programs do not count as income. That includes:
- Temporary Assistance to Needy Families (TANF)
- Supplemental Security Income (SSI)
- Electronic Food and Nutrition Benefits
- General Assistance
Self-Support Reserve for Parents with Low Income
In low-income families, the North Carolina Child Support Guidelines create a base standard of living connected to the federal poverty level. Any time a person’s adjusted gross income is below that “self-support reserve,” a minimum support order of $50 is generally appropriate.
Deviations Based on Need
Sometimes, a family’s circumstances don’t fit into the boxes created by the Guidelines. In those cases, one or both parents can ask the North Carolina family court judge to “deviate” from the guidelines based on the child’s reasonable needs, or the parties’ ability to provide support. This could include:
- Special needs
- Extraordinary medical expenses
- Private tuition payments
- A parent’s disability making him or her unable to pay support
- A parent’s ability to pay independent of income
Proving Income for Business Owners and Self-Employed Parents
When a parent doesn’t have a standard salary or wage-based income, establishing that parent’s income can be especially difficult. For business owners it requires the child support attorneys to review the business’s disbursements and in-kind compensation. For commission-based workers, seasonal employees, or self-employed workers, your attorney may need to look further at past years’ income to establish an average amount that should apply going forward.
At the Cox Law Firm, our experienced and compassionate child support attorneys understand the North Carolina Child Support Guidelines and what counts as income, even in unusual family situations. We can help you get the child support you need or avoid paying more than you should. If you are ready to get started, please get in touch with the Cox Law Firm by calling 704-243-9693 or visiting our Contact Page.