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:

paid wages

overtime pay

commissions

bonuses

other monies from all employers as a result of any employment

pension earnings

insurance contracts

annuities

trust funds

deferred compensation

social security

supplemental unemployment benefits

disability insurance

disability benefits

worker's compensation benefits

earnings from business partnerships

rental revenue

tips

capital gains

military specialty pay

military allowances for quarters and rations

BAH-II

veterans' administration benefits

G.I. benefits

drill pay

royalties

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.

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