When two parents divorce, the noncustodial parent is generally legally required to pay child support to the custodial parent. In order to ensure a fair amount is provided, a judge will use the North Carolina Child Support Guidelines to calculate child support. To help you understand what these guidelines contain and how they’re applied, our divorce attorneys in Raleigh are providing a more in-depth guide.
Understanding the North Carolina Child Support Guidelines
The North Carolina Child Support Guidelines are a document used to calculate how much child support is paid from one parent to the other. At least every four years, the guidelines are reviewed, and if necessary, revised. The current guidelines went into effect on March 1, 2020 and apply to child support actions heard on or after that date.
The minimum child support that may be ordered by the court is $50.00. This amount would be appropriate for any party earning an adjusted gross income of less than $1,108.00 per month. Beyond that, the criteria laid out in the NC Child Support Guidelines include:
Income is the primary criteria for setting child support and calculations under the Guidelines are based on the parents’ current incomes at the time the order is entered. Income statements should be verified through documentation of both current and past income, including pay stubs, employer statements, business receipts and expenses and most recent tax returns.
Child support is primarily based on each party’s monthly gross income from any source, including but not limited to:
- Salaries and wages
- Commissions and bonuses
- Severance pay
- Ownership or operation of a business, partnership, or corporations
- Rental property income
- Retirement or pension
- Trusts & annuities
- Workers’ compensation benefits
- Unemployment insurance benefits
- Alimony or maintenance received from persons other than the parties to the instant action
When income is received on an irregular, non-recurring, or one-time basis, the court may average or pro-rate the income over a specified period of time or require an obligor to pay as child support a percentage of his or her non-recurring income that is equivalent to the percentage of his or her recurring income paid for child support.
Specifically excluded from income for purposes of calculating child support are:
- Adoption assistance benefits
- Benefits received from means-tested public assistance programs such as Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Electronic Food and Nutrition Benefits and General Assistance
- Child support payments received on behalf of a child other than the child for whom support is being sought in the present action
- Employer contributions toward future Social Security and Medicare payments for an employee
- Amounts that are paid by a parent’s employer directly to a third party or entity for health, disability or life insurance or retirement benefits and are not withheld or deducted from the parent’s wages, salary or pay.
- Income of a person living with a custodial parent but who is not a parent of the child, such as a roommate, romantic partner, or a new spouse.
Income from self-employment or operation of a business
Gross income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation. Ordinary and necessary business expenses do not include amounts allowable by the IRS for the accelerated component of depreciation expenses, tax credits, or any other business expenses determined by the court to be inappropriate for determining gross income. In most cases, this amount will differ from a determination of business income for tax purposes.
Expense reimbursements or in-kind payments, such as the use of a company car, free housing or reimbursed meals, received by a parent in the course of employment, self-employment or operation of a business is counted as income if they are significant and reduce personal living expenses.
Potential or imputed income
If the court finds that a parent’s voluntary unemployment or underemployment is the result of bad faith or deliberate suppression of income to avoid or minimize their child support obligation, child support may be calculated based on that party’s potential rather than actual income. Potential income may not be used as a factor when the parent is physically or mentally incapacitated or is caring for a child who is under the age of three years and for whom child support is being determined. Incarceration should not be treated as voluntary unemployment in establishing or modifying a child support order.
A parent’s potential income must be based on the parent’s assets, residence, employment potential and probable earnings level based on that parent’s recent work history, occupational qualifications and prevailing job opportunities and earning levels in the community and other relevant background factors relating to the parent’s actual earning potential. If the parent does not have a recent work history or vocational training, potential income should not be less than the minimum hourly wage for a 35-hour work week.
Existing Support Obligations and Responsibility for Other Children
Any existing support obligation, whether it’s through a court order, separation agreement, or voluntary child support agreement that has been paid consistently for a reasonable amount of time are deducted from the non-custodial parent’s gross income. This does not include paying back late or missed payments, though a parent’s financial responsibility for his or her natural or adopted children who currently reside with the non-custodial parent (other than those that are the subject of the instant action) is deducted from their gross income. This may not be the sole basis to modify a current child support order.
Alimony will not be deducted from the gross income, but it may be a factor when looking at deviating from the guidelines. Similarly, paying child support for two or more support orders/support agreements besides the one being discussed would also be reason for a deviation from the guidelines.
Child Care Costs
Reasonable child care costs that are, or will be, paid by a parent due to employment or job search are considered in the child support calculation. Other child care costs or a child care tax credit may be the basis for a deviation from the guidelines.
Health Insurance and Health Care Costs
Because health insurance and health care are a necessity, the amount of out of pocket costs for health insurance and health care costs paid for by a parent (or paren’ts spouse) will be factored into the child support calculation. If the children are covered by a family policy, only the portion attributed to the children is considered when calculating child support, and if a specific amount can’t be determined, the total cost of the premium is divided by the total number of people covered by the policy and then multiplied by the number of covered children for whom support is being determined. The guidelines assume $250 per child will be paid on out of pocket healthcare costs, this amount may be ordered with child support or be paid by both parents in a proportion the court deems appropriate.
The court must order either parent to maintain medical health insurance coverage for a child if it is actually and currently available to the parent at a reasonable cost (not in excess of 5 percent of gross income). If such insurance is not available, the court must enter an order requiring the parent to obtain and maintain health insurance for a child if and when the parent has access to reasonably priced health insurance for the child. The court may require one or both parents to maintain dental insurance.
Other Extraordinary Expenses
The following extraordinary expenses may be taken into consideration when calculating child support:
- Expenses related to special or private elementary schools to meet a child’s particular educational needs
- Expenses for transporting the child between the parents’ homes if the court feels it is necessary, reasonable and in the child’s best interests.
Worksheets to Apply NC Guidelines for Child Support
Child support is calculated based on one of the following worksheets based on the circumstances of your particular situation:
- Worksheet A is used when one party has primary physical custody of all the children for whom support is being determined (at least 243 overnights per year). The parent who does not have primary physical custody is ordered to pay child support to the parent who has primary custody.
- Worksheet B – this worksheet is used when the parents share custody of all the children for whom support is being determined (or one parent has primary custody of one of the children and the parties share custody of the other children.) Parents share custody when the child lives with each parent at least 123 overnights during the year and each parent assumes financial responsibility for the child’s expenses during the time the child lives with that parent. A parent does not have shared custody of a child when that parent has visitation rights that allow the child to spend less than 123 overnights per year with that parent. The parent with the higher child support obligation is ordered to pay child support to the other parent.
- Worksheet C – this worksheet is used when primary physical custody of two or more children is split between the parents. Split custody refers to cases in which one parent has primary custody of at least one of the children for whom support is being determined and the other parent has primary custody of the other child or children. The parent with the higher child support obligation is ordered to pay child support to the other parent.
Deviating from North Carolina Child Support Guidelines
While the guidelines are the standard method of determining support payments, either party may request deviation from them. Either party or the court itself may put forth a motion to deviate, and this may be approved if the court finds that applying them would either fall short of, or exceed, the child’s reasonable needs considering the parents’ relative ability to provide support. If the parties agreed to an amount of child support in a Separation Agreement, the court assumes that this amount is reasonable to be ordered as child support unless the party disputing the amount can prove that this amount is unreasonable.
Retroactive (Past) Child Support
For cases pursuing child support for a timeframe prior to filing the action for child support, the court may either apply the Guidelines as they existed at the beginning of the time period in which child support is sought, or award an amount based on the parties’ fair share of actual expenditures for the child’s care. When seeking an award based on actual expenditures, it is important for the parent seeking support to have receipts and any other documentation to prove the actual expenditures. If the parties had entered into a Separation Agreement setting forth child support for the timeframe in which support is sought, the amount in the Agreement will control and will not be changed by the court.
Determining Child Support in High Combined Income Cases
If the parents’ combined adjusted gross income is more than $30,000.00 per month (or $360,000.00 per year), the Guidelines cannot be used. Instead, the court will set an amount of support in such an amount to meet the reasonable needs of the children for health, education and maintenance, taking into account the estates, earnings, conditions, accustomed standard of living of the child and the parties, child care and homemaker contributions of each party, and other facts of the particular case.
Assumptions and Expenses Included in Schedule of Basic Child Support Obligations
The Guidelines are based on an “income shares model,” meaning that the concept of child support is a shared parental obligation and that a child should receive the same proportion of parental income he or she would have received if the child’s parents lived together.
In a proceeding to modify the amount of child support payable under a child support order that was entered at least three years before the pending motion to modify was filed, a difference of 15% or more between the amount of child support payable under the existing order and the amount of child support resulting from application of the Guidelines based on the parent’s current incomes and circumstances shall be presumed to constitute a substantial change of circumstances warranting a modification of the existing child support order.
Incarceration may not be treated as voluntary unemployment in establishing or modifying a child support order.
The need to provide for the child’s health care needs in a child support order, through health insurance or other means, is a substantial change of circumstances warranting modification of a child support order, regardless of whether an adjustment in the amount of child support is necessary.
Consult with a Family Law Attorney Today
To learn more about the North Carolina Child Support Guidelines and get a better idea of what you can expect to pay or receive, schedule a consultation with our family law attorneys today. Call us at (919) 205-9728 or fill out the form below to learn more.
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