More changes afoot in regard to child support in Illinois. Starting July 1, 2017, the method in which child support is calculated will change drastically. In a prior blog post, we addressed a broad overview of the coming changes. In this blog post, we will explore the changes in more detail.
In short, Illinois is moving to an income shared approach that considers both parties’ income in determining the level of child support. While this change is drastic enough, further changes are made in terms of how we determine the parties’ income that warrant separate consideration. This is the focus of this article.
Attorneys will often use a computer program to assist in calculating the child support obligation. The purpose of using these programs is that they calculate estimated tax liability at a time when the tax liability may not be fully known prior to the filing of the tax returns and additional information that may affect the tax liability but does not impact the child support calculation. The calculation of child support, whether done by a computer program or by hand, can be impacted by several variables. One example is whether the tax liability should be based on filing as single parent or a couple if that party has remarried. Another variable or issue is how many dependents to claim, especially if a party has dependents from other relationships.
Under the new statute, many of these issues are now codified. The changes will, thus, provide more consistent results. Starting in July 2017, gross income for child support will be defined as income from all sources except for certain means-tested public assistance programs such as TANF, SSI or SNAP. Furthermore, gross income does not include benefits received by the parent for other children in the household including child support, survivor benefits and foster care payments.
In the other hand, Social Security disability and retirement benefits paid for the benefit of a child must be included in the parent’s gross income, though a child support credit will be provided for the amounts of the benefits paid to the other parent for that child. Finally, spousal support or maintenance received pursuant to a court order in the current proceeding or other proceedings must also be included in the recipient’s gross income for purposes of calculating the parent’s child support obligation.
Under the current statute, after we ascertain gross income, we determine a net income after subtracting out properly calculated Federal and State income taxes, FICA taxes, health insurance, union dues and mandatory retirement contributions. As discussed above, results can vary based upon how the Federal and State income tax liabilities are calculated. Under the new statute, net income is defined purely as the, “gross income minus either the standard tax amount…or the individualized tax amount calculated, minus any further adjustments as provided by the statute.” The standard tax amount is to be used unless certain requirements for an individualized tax amount are met.
The standardized tax amount simply means the Federal and State income taxes for a single person claiming the standard tax deduction, one (1) personal exemption, the applicable number of dependency exemptions for the minor child or children of the parties and FICA taxes. This new statutory definition removes the disagreements over whether or not to use a parties’ new marital status in calculating support or dependents from other relationships. The statute makes clear that the parties should be taxed as single and only include the dependency exemptions for the number of children of the parties.
The individualized tax amount means the aggregate of the federal income taxes, properly calculated withholding or estimated payments; State income taxes properly calculated withholding or estimated payments, and the FICA taxes. However, an individual tax amount may only be used if either: a) there exists an agreement of the parties as to a computation method stipulated to by the parties, and the court accepts the stipulated method for a good cause; b) if at a summary hearing to determine temporary support and the party seeking the individualized tax assessment provides the other side with a financial affidavit and supporting documents as required by the rules; or c) if after an evidentiary hearing, the court determines child support either on a temporary or permanent basis as established by the evidence presented to the court.
Finally, gross income may further be adjusted if the parent has another support obligation outside of the current proceeding. If the parent has another child support obligation or maintenance obligation to a separate child(ren) or spouse, there will be an adjustment.
As can be seen, while the new laws attempt to clarify, simplify and standardize the method by which child support is calculated, the need to have confident legal representation in determining child support has not changed. It is always important to hire an attorney with an understanding of the laws as they change and how those changes will impact your case. Feel free to contact us in order to discuss your matter and receive the confident legal representation to which you are entitled.630-523-0543 www.batavialaw.com [email protected]