Child support is a complicated and often emotionally-driven issue for many families. Fortunately, California has a robust system to help parents navigate child support from start to finish, and it’s often possible to avoid court altogether. Your local agency can help both parties reach an amicable solution at little or no cost while minimizing the stress of what can otherwise be an emotionally draining process.
Although there is a clear process to establish child support in California, having the help of an attorney may bring the cost of child support down.
Is Child Support Taxable In California?
According to the IRS, “child support payments are neither deductible by the payer nor taxable to the recipient.” This means that the payer bears the tax burden when they earn the income used to pay child support, and the recipient pays no tax. The tax treatment of child support is, therefore, a significant factor in calculating child support, since the recipient receives the tax advantage.
Of course, there are additional tax consequences. For example, who gets to claim the child as a dependent? Generally, this privilege is granted to the “custodial parent,” who may be the payer or the recipient of child support. In practice, it often makes the most sense to afford this tax benefit to the payer of child support, and the parties may agree accordingly.
The Tax Cut and Jobs Act of 2017 had a major impact on the tax treatment of child support, among other matters (namely alimony). In many ways, it simplified the tax treatment of these matters. However, the drastic shift, as well as any possible changes from what is now a flipped Congress, makes it especially advisable to have a tax attorney help implement or amend any child support.
How Do I Calculate Child Support?
California uses defined guidelines to calculate child support, with the aim of establishing uniform treatment of parents engaging in child support and, more importantly, providing a threshold level of financial assistance for the child’s care. The guideline factors in several values: each parent’s gross income, the higher earner’s disposable income, the percentage of time the child will spend with each parent, and more. California Child Support Services has a detailed, online calculator to help you develop a thorough estimate of your child support payments, and you may also find simpler (but less accurate) calculators from third parties.
The state guideline is merely a minimum threshold, and both parents are ultimately responsible for providing the care and support their children need. There may be circumstances in which it makes sense to deviate from the guideline, whether that means providing more or less child support than the guideline strictly demands.
It’s important to remember the tax consequences of child support payments and how they relate to calculating the minimum payments. For example, consider two taxpayers with effective tax rates of 20%, where the payer needs to provide $1000 per month in child support. If the payer bears the tax burden, then they need to earn $1250 in order to pay the $1000 owed, and the recipient actualizes a $1000 gain. On the other hand, if the recipient bears the tax burden, then the payer needs only earn $1000 to make the payment, and the recipient actualizes an $800 gain. Therefore, as tax laws change, child support payments often need to be revisited in order to ensure the child receives the financial support they need to thrive.
Q: What happens if I stop paying child support?
A: California takes failure to pay child support very seriously. Falling behind in required payments will result in interest charges of 10% per year, and it may result in the state garnishing your wages, suspending your license(s), placing a lien on your property, etc. Moreover, willful refusal to follow any court order, including one to pay child support, may even constitute “contempt of court,” which could result in jail time.
Q: Can we change child support payments after they’ve been established?
A: Yes. Mandatory child support payments may be amended or even eliminated via court order. A court may, upon petition, decide to recalculate child support payments based on substantial changes in (1) the relative income levels of each parent or (2) the amount of time each parent spends with the child. However, this change is neither automatic nor retroactive, and so it’s important to initiate proceedings as soon as the need arises. California has a quick guide to help you identify possible grounds to modify your child support payments and what information you will need to succeed.
Q: How can I stop paying child support?
A: Generally, child support is designed to last until the child turns 18 or graduates high school. It may last longer for medical reasons or where the parents agree, or it may be cut short where the child (1) marries, (2) joins the military, (3) is emancipated, or (4) passes away. However, child support does not end automatically; you will need to petition the court when the time comes.
Contact Pride Legal
If you or a loved one believe you are paying child support, we invite you to contact us at Pride Legal for legal counseling or any further questions. To protect your rights, hire someone who understands them.