Starting January 1, 2017, changes made to the Michigan Child Support Formula went into effect that can have a big impact on paying or receiving child support.
Many parents assume that their net taxable income reported to the IRS on their tax returns will be what the court uses to calculate child support. This is not necessarily true. For example, while depreciation on a rental property is an allowable tax deduction, the court sees this as money that is available to pay support and adds it back into income. There are exceptions to the rule disallowing certain depreciation deductions, however, as some types of depreciation are allowed.
Some rules for calculating income have also changed. When an employer reimburses an employee for things like tuition, educational costs, uniforms, and payments to health savings accounts, these items do not count as income available to pay child support under the formula. Further, most employer contributions to pension or retirement plans have been removed from income. On the other hand, perks offered by employees such as housing, meals, room and board, and personal use of a company business vehicle may be counted as income and the formula requires that they be added back into income when calculating support.
The amended formula has also changed the way in which the actual cost of court ordered health insurance premiums impact the child support calculation.
Finally, the guidelines have clarified the issue of the court “assuming” a certain income for a parent regardless of whether that parent is actually working. In other words, the court would traditionally insert an income based upon that parent’s potential earnings if they were to go to work. Often this would be an assumption of full-time work at minimum wage, or roughly $15,000 per year. Under the new law, the court must make actual findings as to the parent’s income history in order to insert an income if that parent claims be unemployed.
These changes, among many others, can affect how much a parent pays for child support. In particular, the new rules for determining potential income for a non-working parent will require an experienced attorney. Whether you are thinking about getting a divorce, are dealing with a child custody or paternity proceeding, or want to look into modifying your existing child support, we here at ADAM know the new Michigan Child Support Formula inside and out. We are ready to assist you.
About ADAM (American Divorce Association for Men)
The American Divorce Association for Men (ADAM) is a group of highly qualified attorneys who advocate for men’s rights in divorce, child custody and parenting time, paternity, support, property settlement, post judgment modifications, and other family law matters. Since 1988, ADAM has been aggressive, diligent, and uncompromising when representing their clients. A team of compassionate and skilled family law attorneys, ADAM is dedicated to being Michigan’s leading divorce attorneys for men and practices a policy of integrity in all dealings.