Understanding Child Support in Michigan: Determining Income
In my last post in the Understanding Child Support in Michigan series, I broke down what the term 'child support' really means. We know now that child support is a financial obligation.
But how is this financial obligation determined?
There are several factors that will all be discussed; the first, most easily understandable factor is the income of each parent of the minor child for whom child support is ordered.
The income for child support calculations is the net income of the parties. "Net income" for child support determinations is not net taxable income. Rather, it is all of the income received by a parent "minus the deductions and adjustments permitted..." by the Michigan Child Support Formula (MCSF) Manual. See: 2013 MCSF 2.01 (A).
Section 2.01 (C) of the MCSF Manual lists the following types of income sources:
other monies from all employers as a result of any employment
supplemental unemployment benefits
worker's compensation benefits
earnings from business partnerships
military specialty pay
military allowances for quarters and rations
veterans' administration benefits
interest and dividends
gambling and lottery winnings
adoption subsidies (basic needs)
employer contributions to pension or other retirement plans
in-kind goods received in lieu of payment
non-cash benefits which reduce personal expenses
Section 2.07 of the MCSF Manual lists allowable deductions from income, which include actual income taxes, union dues, mandatory retirement contributions and spousal support that is paid to someone other than the other parent. Section 2.08 of the MCSF Manual also lists an adjustment in income pursuant to minor children from other relationships.
In the next post, we'll briefly look at the how the parenting arrangements for a minor child can affect the child support obligation of each party.