Child support and child custody issues are one of the most difficult to settle in a divorce. With recent tax law changes, do you know how much your child support will be?
How is child support calculated?
Generally, the number of children and a percentage of the parent’s monthly income informs the greatest portion of child support. The following is a short breakdown of these expectations:
- 1 child: 17% of your income
- 2 children: 25% of your income
- 3 children: 29% of your income
Wisconsin courts also take the following into account:
- Amount of time each parent will spend with the child
- Amount of children each parent has (especially from before your marriage)
- Low income or limited income status
- The parent’s income history and ability to earn income, including current health
- The child’s current health or disability status
- Benefits from government programs (veteran benefits, unemployment, social security, etc.)
- Income from any legal settlements, investments
These payments are to cover living expenses for your children related to housing, food, clothing, medical care, education and more. Your unique situation will influence this decision.
How will child support impact your divorce settlement?
Thanks to the Tax Cuts and Jobs Act, alimony is no longer tax-deductible and child support is not taxable income. Child support is, in other words, a tax-neutral event. This could encourage parents to focus on their children rather than their personal disputes.
Now, the custodial parent can receive a child tax credit when parents file separately. The non-custodial parent can claim them if the custodial parent agrees not to do so and files IRS Form 8332. Using that form, parents who share custody can alternate who claims the credit.
If you are planning to divorce and either of you have children, you may want to explore your legal options. Even civil and respectful parents must handle their divorces with care to avoid unnecessary stress on their children and their finances.