Child Support
What are Wisconsin's Support Laws?
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Disputes regarding child support can be nearly as acrimonious and challenging as an underlying placement dispute.
STATUTORY ADMINISTRATIVE CODES
Wisconsin Statutes 767.511 coupled with the Administrative Code DCF 150 govern the establishment and payment of child support in divorce, legal separation and paternity cases.
The statutes require that a child support order be entered in every judgment of divorce, legal separation or paternity where, obviously, minor children are involved. The support award shall be stated as a fixed dollar sum other than in only the rarest circumstances.
How is support calculated?
While support will be stated as a fixed dollar sum, the figure is arrived at in the vast majority of cases by the percentage guidelines set forth in DCF 150.
Support is calculated on gross income which means that the child support is not deductible by the payor nor includable as income to the recipient.
is child support taxed income?
There are instances where it might be in the mutual interest of the parties to treat child support in a manner that affords a tax benefit to the payor. For example, if the payor’s income is substantially greater than the recipient’s, the parties might decide to characterize the payments as family support. Family support is deductible to the payor and included as income to the recipient.
Family support is often used in cases with a mixed support component of maintenance (spousal support) and child support. It may be in both parties’ interest to shift the tax burden to the recipient in order to lower the taxable income of the payor and shift the burden to the recipient at a lower tax bracket. The end result is the parties give less money to the government which allows more for the support of the parties and children.
Who claims the child as a dependent after divorce?
It is most often the case that when the parties have fairly equal placement or a significant child support award is payable from one to the other, that the dependency exemptions are shared or alternated on an annual basis. Any child support award should also include an assignment of the dependency exemptions.
Who is the head of household?
The party with a majority of placement is entitled to the “Head of Household” deduction per IRS code. The parties have some discretion with regard to the assignment of this tax benefit when placement is virtually equal and/or the parties have more than one child and placement is such that the “Head of Household” benefit can legally be alternated or assigned to either party or the placement can be structured to assign one or more children to each party. As with any tax issue the counsel of a qualified tax adviser or CPA is advisable.
How is the percentage method used?
In a case when one parent has more than 75% of the placement, the non-primary placement parent will likely pay support on the basis of the standard percentage guidelines. The percentage standard applies to gross “pretax” income or, in the event of self employed individuals, “Adjusted gross income”.
What are the percentages for child support in Wisconsin?
Those percentages are as follows:
| Number of Children | Percentage of Income |
|---|---|
| 1 | 17% |
| 2 | 25% |
| 3 | 29% |
| 4 | 31% |
| 5 or more | 34% |
While the application of the percentage guideline is likely in these cases, the Court may deviate from the application of the guideline if it finds that the application is unfair to the child or either party.
The factors the Court can consider in deviating from the guidelines are articulated in 767.511(1m). Some of those factors are:
- The financial resources of the child and/or both parents;
- Maintenance received by a party;
- The needs of any person other than the child whom either party is legally obligated to support;
- The needs of each party in order to support himself or herself at a level equal to or greater than that established under 42 USC 9902(2);
- The cost of daycare or the value of care if the custodial parent remains in home;
- The earning capacity of each party;
- Tax consequences;
- Any other factors which the Court in each case determines are relevant.
Some of these factors might be used to seek an order below guidelines while others would support an order in excess. Each case presents a unique set of facts that an experienced Attorney will analyze and seek to obtain an order that is fair and appropriate for their client.
How is support calculated for shared time & unequal incomes?
When each party has placement for at least 25% of overnights or the equivalent, the support calculation is adjusted by an arithmetic formula to account for the substantial periods of placement in each home.
The formula is found in DCF 150.04(2) and the calculation is designed to allocate financial resources for the child in each home in keeping with the respective incomes of the parties and the percentage of time the child or children spend in each home.
How are variable expenses handled in child support orders?
Variable expenses are defined as the reasonable costs above basic support costs incurred by or on behalf of a child including but not limited to, the cost of child care, tuition, a child’s special needs, and other activities that involve substantial cost.
Variable expenses are often apportioned in shared payor cases in concert with the percentage of placement each parent is awarded. While this approach is not mandatory, an equally shared placement schedule, for example, will usually yield an order for a 50/50 split of variable expenses.
Any child support award should carefully consider and articulate what variable expenses are covered and each parent’s responsibility for same. Variable expenses can represent a substantial sum of money and are an essential component of any child support order.
CONCLUSION
This is certainly not intended to be an exhaustive discussion of the law facts and issues involved in arriving at a just and appropriate child support award, tax arrangement and split of variable expenses. Suffice to say that while the guidelines are often applied there are indeed a number of factors articulated in the statutes and DCF 150 to be considered and if necessary presented during negotiations or at trial or hearing in order to arrive at a fair and appropriate financial arrangement and support award.
Contact Riley Law Office
If Attorney Tim Riley can be of assistance to you with your legal situation, please call Riley Law Office for a free initial consultation at (608) 833-3880 or email Attorney Riley. Attorney Riley will be happy to speak with you with no obligation on your part.