Regardless of whether parents stay together as intimate partners, parents always have a legal obligation to provide financial support to children. When it comes to child support in Texas, there is a great deal of information to know. In this post, we will go over the essential points of how child support amounts are determined. As we will see, the child support determination process follows rules and guidelines which are firmly established. This ensures predictability and simplicity.
Calculating Monthly Net Income
One important point to know about child support is that typically only the non-custodial parent will actually transfer money. Typically we presume that the parent who has primary physical custody will provide the necessary financial care as a matter of course. This means that child support payments will always flow in one direction, and not the other. So when it comes to calculating monthly child support, it’s important to know that this calculation will only apply to one parent, rather than both.
The first step is to determine the non-custodial parent’s monthly gross income. Gross income includes nearly all forms of income – salary, wages, tips, commissions, overtime pay, and so forth. Gross income also includes other, less intuitive forms of income, such as severance pay, workers’ compensation awards, Social Security payments, self-employment income, unemployment checks, and so forth. The non-custodial needs to add up all income from these sources and compute a total monthly amount.
After computing monthly gross income, the non-custodial parent needs to determine the monthly net income. Net income equals gross income minus applicable deductions. For child support calculation purposes, acceptable deductions include federal income taxes, health insurance premiums (associated with the child), payroll taxes, and mandatory retirement account contributions, and others as well. Texas has a full list of deductions in the Texas Family Code. After subtracting the deductions from the gross income, the remaining figure is the net monthly income. A calculator for child support may be found here.
Determining Monthly Amount
After determining a monthly net resources, the next step is to calculate a monthly payment amount. The procedure for calculating this amount is straightforward: the non-custodial parent takes the net monthly resources and then multiples that figure by a certain percentage. The exact percentage depends on the number of children. So, for instance, if the payments are for a single child, then the multiplier is 20%. The other percentages are as follows: 2 children = 25%, 3 children = 30%, 4 children = 35%, 5 children = 40%, and 6 children or more = a percentage not less than 40%, but the exact percentage may be determined by the court.
Let’s consider an example. A non-custodial parent has a monthly gross income of $5,000, and $1,500 in monthly allowable deductions. This brings the monthly net resources to $3,500. If we assume this parent has only a single child, then the monthly support obligation would be $700, because $700 = $3,500 x 20%.
Contact Divorce Concierge for More Information
Readers should note that this is merely an overview. There is more to learn when it comes to child support determinations, but this is a good starting point. For instance, there is a possibility that the non-custodial parent can challenge the child support amount, even if that amount has been determined by these established methods. For more information contact Divorce Concierge today.