Source: http://network-democracy.org/5113
Timestamp: 2017-12-16 18:47:09
Document Index: 79269089

Matched Legal Cases: ['§ 302', '§ 103', '§ 651', '§ 103', '§ 103', '§ 61', '§ 31']

Can i claim child care expenses without claiming the child – network-democracy.org
1 IRS Publication 503: Child And Dependent Care Expenses
1.1 DEFINITION of 'IRS Publication 503: Child And Dependent Care Expenses'
1.2 BREAKING DOWN 'IRS Publication 503: Child And Dependent Care Expenses'
2 Updated 2016: Can I Claim My Foster Child On My Taxes?
2.1 You’re a new foster parent. You attended the orientation, filled out all of the proper paperwork, went through every inspection process and took all of the appropriate training. You waited longer than expected but finally have a foster child in your home. You’ve found out this new world of fostering is extremely rewarding, and the idea of providing a loving home for a child in need has made your life richer. Your foster child has been in your home for 6 months and tax season is at hand. You have other children and know the steps you need to take to claim them for tax purposes, but what about your foster child? You may be wondering, “Can I claim my foster child on my taxes?” If you meet certain criteria, the answer is yes.
2.2 Can I Claim My Foster Child On My Taxes? – Qualifications
2.3 Can I Claim My Foster Child On My Taxes? – What if I’m Disallowed?
2.4 Can I Claim My Foster Child On My Taxes? – The More You Know
2.4.0.1 Author: Salendria Mabrey, FAFS Communication &#38; Development Associate
3 can i claim child care expenses without claiming the child
DEFINITION of 'IRS Publication 503: Child And Dependent Care Expenses'
BREAKING DOWN 'IRS Publication 503: Child And Dependent Care Expenses'
You’re a new foster parent. You attended the orientation, filled out all of the proper paperwork, went through every inspection process and took all of the appropriate training. You waited longer than expected but finally have a foster child in your home. You’ve found out this new world of fostering is extremely rewarding, and the idea of providing a loving home for a child in need has made your life richer. Your foster child has been in your home for 6 months and tax season is at hand. You have other children and know the steps you need to take to claim them for tax purposes, but what about your foster child? You may be wondering, “Can I claim my foster child on my taxes?” If you meet certain criteria, the answer is yes.
Your answers line up! Also, your foster child is a U.S. citizen and has a valid Social Security number, so she can be claimed as a dependent on your 2016 taxes, which will bring a reduction to your gross income by $4,050.00.
Can I Claim My Foster Child On My Taxes? – What if I’m Disallowed?
Author: Salendria Mabrey, FAFS Communication &#38; Development Associate
1. Adjustment for Subsequent born or Legally Adopted Child(ren).
4. Alimony or Maintenance.
· Amended Child Support Obligation Worksheet (CSOW)
· Parenting Time Credit Worksheet
· Post-Secondary Education Worksheet (PSEW)
· Guideline Schedules for Weekly Support Payments
Guidelines to determine levels of child support and educational support were developed by the Judicial Administration Committee of the Judicial Conference of Indiana and adopted by the Indiana Supreme Court. The guidelines are consistent with the provisions of Indiana Code Title 31 which place a duty for child support and educational support upon parents based upon their financial resources and needs, the standard of living the child would have enjoyed had the marriage not been dissolved or had the separation not been ordered, the physical or mental condition of the child, and the child's educational needs.
Based on this economic evidence, the Indiana Child Support Guidelines calculate child support as the share of each parent's income estimated to have been spent on the child if the parents and child were living in an intact household. The calculated amount establishes the level of child support for both the custodial and non-custodial parent. Absent grounds for a deviation, the custodial parent should be required to make monetary payments of child support, if application of the parenting time credit would so require.
History of Development. In June of 1985, the Judicial Reform Committee (now the Judicial Administration Committee) of the Judicial Conference of Indiana undertook the task of developing child support guidelines for use by Indiana judges. While the need had been long recognized in Indiana, the impetus for this project came from federal statutes requiring guidelines to be in place no later than October 1, 1987. P.L. &8&#8209;378. Paradoxically, guidelines did not need to be mandatory under the 1984 federal legislation to satisfy federal requirements; they were only required to be made available to judges and other officials with authority to establish child support awards. 45 CFR Ch. III, § 302.56.
Family Support Act of 1988. On October 13, 1988, the United States Congress passed the "Family Support Act of 1&88,9quot; P.L. 100&#8209;485 amending the Social Security Act by deleting the original language which made application of the Guideline discretionary and inserted in its place the following language:
"There shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case." P.L. 100&#8209;485, § 103(a)(2).
The original Guidelines that went into effect October 1, 1987 and their commentary were revised by the Judicial Administration Committee to reflect the requirement that child support guidelines be a rebuttable presumption. The requirement applies to all cases where support is set after October 1, 1989, including actions brought under Title IV&#8209;D of the Social Security Act (42 U.S.C.A. § 651&#8209;669). Also, after October 1, 1989, counties and individual courts may not opt to use alternate methods of establishing support. The Indiana Child Support Guidelines were required to be in use in all Indiana courts in all proceedings where child support is established or modified on and after October 1, 1989.
Periodic Review of Guidelines and Title IV&#8209;D Awards. The "Family Support Act of 1&889quot; also requires that the Guidelines be reviewed at least every four years "to assure their application results in the determination of appropriate child support award amounts." P.L. 100&#8209;485, § 103(b). Further, each state must develop a procedure to ensure that all Title IV&#8209;D awards are periodically reviewed to ensure that they comply with the Guidelines. P.L. 100&#8209;485, § 103(c).
Economic Data Used in Developing Guidelines. What does it take to support a child? The question is simple, but the answer is extremely complex. Yet, the question must be answered if an adequate amount of child support is to be ordered by the court. Determining the cost attributable to children is complicated by intertwined general household expenditures. Rent, transportation, and grocery costs, to mention a few, are impossible to accurately apportion between family members. In developing these Guidelines, a great deal of reliance was placed on the research of Thomas J. Espenshade, (Investing In Children, Urban Institute Press, 1984) generally considered the most authoritative study of household expenditure patterns. Espenshade used data from 8,547 households and from that data estimated average expenditures for children present in the home. Espenshade's estimates demonstrate that amounts spent on the children of intact households rise as family income increases. They further demonstrate at constant levels of income that expenditures decrease for each child as family size increases. These principles are reflected in the Guideline Schedules for Weekly Support Payments, which are included in the Indiana Child Support Guidelines. By demonstrating how expenditures for each child decrease as family size increases, Espenshade should have put to rest the previous practice of ordering equal amounts of support per child when two or more children are involved. Subsequent guidelines reviews have considered more current economic studies of child-rearing expenditures (e.g., Mark Lino, Expenditures on Children by Families: 2006 Annual Report, United States Department of Agriculture, 2007; David Betson, State of Oregon Child Support Guidelines Review: Updated Obligation Scales and Other Considerations, report to State of Oregon Department of Justice, 2006). These periodic guidelines reviews have concluded that the Indiana Guidelines based on the Espenshade estimates are generally within the range of more current estimates of child-rearing expenditures. A notable exception at high incomes leveled off the child support schedule for combined weekly adjusted incomes above $4,000. In 2009 this exception was removed. The increase is now incorporated into the schedule up to combined weekly adjusted incomes of $10,000 and a formula is provided for incomes above that amount. Previously, a formula was provided for combined weekly adjusted incomes above $4,000.
3. Work&#8209;related child care expenses and the weekly costs of health insurance premiums for the child(ren) are then added to the basic child support obligation.
4. The child support obligation is then prorated between the parents, based on their proportionate share of the weekly adjusted income, hence the name "income shares."
The Income Shares Model was developed by The Institute for Court Management of the National Center for State Courts under the Child Support Guidelines Project. This approach was designed to be consistent with the Uniform Marriage and Divorce Act, the principles of which are consistent with IC 31&#820&;16&#8209;6&#8209;1. Both require the court to consider the financial resources of both parents and the standard of living the child would have enjoyed in an intact family.
"Because the noncustodial parent suffers from a chronic medical condition requiring uninsured medical expenses of $357.00 per month, the Court believes that setting child support in the Guideline amount would be unjust and instead sets support in the amount of $___per week."
1. Phasing in Support Orders. Some courts may find it desirable in modification proceedings to gradually implement the Guideline order over a period of time, especially where support computed under the Guideline is considerably higher than the amount previously paid. Enough flexibility exists in the Guidelines to permit that approach, as long as the judge's rationale is explained with an entry such as:
"The Guideline's support represents an increase of 40%, and the court finds that such an abrupt change in support obligation would render the obligor incapable of meeting his/her other established obligations. Therefore, the Court sets support in the amount of $_____ and, on October 1, 20___, it shall increase to $_____ and, on September 1, 20__, obligor shall begin paying the Guideline amount of $_____."
· One or both parties pay union dues as a condition of employment.
· A party provides support for an elderly parent.
· The noncustodial parent purchases school clothes.
· The noncustodial parent has extraordinary medical expenses for himself or herself.
· Both parents are members of the armed forces and the military provides housing.
· The obligor is still making periodic payments to a former spouse pursuant to a prior Dissolution Decree.
· One of the parties is required to travel an unusually long distance in the course of employment on a regular or daily basis and incurs an unusually large expense for such travel, and
· The custodial or noncustodial parent incurs significant travel expense in exercising parenting time.
The Guideline Schedules provide calculated amounts of child support. For obligors with a combined weekly adjusted income, as defined by these Guidelines, of less than $100.00, the Guidelines provide for case&#820&;by&#8209;case determination of child support. When a parent has extremely low income the amount of child support recommended by use of the Guidelines should be carefully scrutinized. The court should consider the obligor's income and living expenses to determine the maximum amount of child support that can reasonably be ordered without denying the obligor the means for self&#8209;support at a minimum subsistence level. The court may consider $12.00 as a minimum child support order; however, there are situations where a $0.00 support order is appropriate. A numeric amount of child support shall be ordered.
Temporary maintenance may be awarded by the court not to exceed thirty&#8209;five percent (35%) of the obligor's weekly adjusted income. In no case shall child support and temporary maintenance exceed fifty percent (50%) of the obligor's weekly adjusted income. Temporary maintenance and/or child support may be ordered by the court either in dollar payments or "in&#8209;kind9quot; payments of obligations.
Federal law requires the Indiana Child Support Guidelines be applied in every instance in which child support is established including, but not limited to, dissolutions of marriage, legal separations, paternity actions, juvenile proceedings, petitions to establish support and Title IV D proceedings.
Minimum Support. The Guideline's schedules for weekly support payments do not provide an amount of support for couples with combined weekly adjusted income of less than $100.00. Consequently, the Guidelines do not establish a minimum support obligation. Instead the facts of each individual case must be examined and support set in such a manner that the obligor is not denied a means of self&#8209;support at a subsistence level. For example, (1) a parent who has a high parenting time credit; (2) a parent who suffers from debilitating mental illness; (3) a parent caring for a disabled child; (4) an incarcerated parent; (5) a parent or a family member with a debilitating physical health issue; or, (6) a natural disaster are significant but not exclusive factors for the court to consider in setting a child support order. The court should not automatically attribute minimum wage to parents who, for a variety of factors, are not capable of earning minimum wage.
Temporary Maintenance. It is recommended that temporary maintenance not exceed thirty&#8209;five percent (35%) of the obligor's weekly adjusted income. The maximum award should be reserved for those instances where the custodial spouse has no income or no means of support, taking into consideration that spouse's present living arrangement (i.e., whether or not he or she lives with someone who shares or bears the majority of the living expense, lives in the marital residence with little or no expense, lives in military housing, etc.).
It is further recommended that the total of temporary maintenance and child support should not exceed fifty percent (50%) of the obligor's weekly adjusted income. In computing temporary maintenance, in&#8209;kind payments, such as the payment of utilities, house payments, rent, etc., should also be included in calculating the percentage limitations. Care must also be taken to ensure that the obligor is not deprived of the ability to support himself or herself.
Spousal Maintenance. It should also be emphasized that the recommendations concerning maintenance apply only to temporary maintenance, not maintenance in the Final Decree. An award of spousal maintenance in the Final Decree must, of course, be made in accordance with Indiana statute. These Guidelines do not alter those requirements. Theoretically, when setting temporary maintenance, child support should come first. That is, if child support is set at forty percent (40%) of the obligor's weekly adjusted income, only a maximum of ten percent (10%) of the obligor's income would be available for maintenance. That distinction, however, makes little practical difference. As with temporary maintenance, care should be taken to leave the obligor with adequate income for subsistence. In many instances the court will have to review the impact of taxes on the obligor's income before entering an order for spousal maintenance in addition to child support to avoid injustice to the obligor.
The worksheet provides a deduction for spousal maintenance paid (Line 1D). Caution should be taken to assure that any credit taken is for maintenance and not for periodic payments as the result of a property settlement. No such deduction is given for amounts paid by an obligor as the result of a property settlement, although that is a factor the court may wish to consider in determining the obligor's ability to pay the scheduled amount of support at the present time. Again, flexibility was intended throughout the Guidelines and they were not intended to place the obligor in a position where he or she loses all incentive to comply with the orders of the court.
Guidelines to be Applied in all Matters of Child Support. The Indiana Child Support Guidelines shall be applied in every instance in which child support is established including, but not limited to, dissolutions of marriage, legal separations, paternity actions, juvenile proceedings, petitions to establish support and Title IV&#8209;D proceedings.
1. Definition of Weekly Gross Income (Line 1 of Worksheet). For purposes of these Guidelines, "weekly gross income" is defined as actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed, and imputed income based upon "in&#8209;kind9quot; benefits. Weekly gross income of each parent includes income from any source, except as excluded below, and includes, but is not limited to, income from salaries, wages, commissions, bonuses, overtime, partnership distributions, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workmen's compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, inheritance, prizes, and alimony or maintenance received. Social Security disability benefits paid for the benefit of the child must be included in the disabled parent’s gross income. The disabled parent is entitled to a credit for the amount of Social Security disability benefits paid for the benefit of the child. Specifically excluded are benefits from means&#8209;tested public assistance programs, including, but not limited to, Temporary Aid to Needy Families (TANF), Supplemental Security Income, and Food Stamps. Also excluded are survivor benefits received by or for other children residing in either parent’s home.
2. Self&#8209;Employment, Business Expenses, In&#8209;Kind Payments and Related Issues. Weekly Gross Income from self&#8209;employment, operation of a business, rent, and royalties is defined as gross receipts minus ordinary and necessary expenses. In general, these types of income and expenses from self&#8209;employment or operation of a business should be carefully reviewed to restrict the deductions to reasonable out&#820&;of&#8209;pocket expenditures necessary to produce income. These expenditures may include a reasonable yearly deduction for necessary capital expenditures. Weekly Gross Income from self&#8209;employment may differ from a determination of business income for tax purposes.
Expense reimbursements or in&#8209;kind payments received by a parent in the course of employment, self&#8209;employment, or operation of a business should be counted as income if they are significant and reduce personal living expenses. Such payments might include a company car, free housing, or reimbursed meals.
The self&#8209;employed shall be permitted to deduct that portion of their FICA tax payment that exceeds the FICA tax that would be paid by an employee earning the same Weekly Gross Income.
3. Unemployed, Underemployed and Potential Income. If a court finds a parent is voluntarily unemployed or underemployed without just cause, child support shall be calculated based on a determination of potential income. A determination of potential income shall be made by determining employment potential and probable earnings level based on the obligor's work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community. If there is no work history and no higher education or vocational training, the facts of the case may indicate that Weekly Gross Income be set at least at the federal minimum wage level.
1. Child Support Calculations Generally. Weekly Gross Income, potential income, weekly adjusted income and basic child support obligation have very specific and well&#8209;defined meanings within the Indiana Child Support Guidelines. Their definitions are not repeated in the Commentary, but further explanation follows.
2. Determination of Weekly Gross Income. Weekly Gross Income is the starting point in determining the child support obligation, and it must be calculated for both parents. If one or both parents have no income, then potential income may be calculated and used as Weekly Gross Income. Likewise, imputed income may be substituted for, or added to, other income in arriving at Weekly Gross Income. It includes such items as free housing, a company car that may be used for personal travel, and reimbursed meals or other items received by the obligor that reduce his or her living expenses.
In calculating Weekly Gross Income, it is helpful to begin with total income from all sources. This figure may not be the same as gross income for tax purposes. Internal Revenue Code of 1986, § 61. Means&#8209;tested public assistance programs (those based on income) are excluded from the computation of Weekly Gross Income, but other government payments, such as Social Security benefits and veterans pensions, should be included. However, survivor benefits paid to or for the benefit of their children are not included. In cases where a custodial parent is receiving, as a representative payee for a prior born child, Social Security survivor benefits because of the death of the prior born child’s parent, the court should carefully consider Line 1 C of the basic child support obligation worksheet, Legal Duty of Support for Prior-born Children. Because the deceased parent’s contribution for the support of the prior born child is being partially paid by Social Security survivor benefits that are excluded from Weekly Gross Income, the court should not enter, on Line 1C, an amount that represents 100% of the cost of support for the prior born child. The income of the spouses of the parties is not included in Weekly Gross Income.
a. Self&#8209;Employment, Rent and Royalty Income. Calculating Weekly Gross Income for the self&#8209;employed or for those who receive rent and royalty income presents unique problems, and calls for careful review of expenses. The principle involved is that actual expenses are deducted, and benefits that reduce living expenses (i.e. company cars, free lodging, reimbursed meals, etc.) should be included in whole or in part. It is intended that actual out&#820&;of&#8209;pocket expenditures for the self&#8209;employed, to the extent that they are reasonable and necessary for the production of income, be deducted. Reasonable deductions for capital expenditures may be included. While income tax returns may be helpful in arriving at Weekly Gross Income for a self&#8209;employed person, the deductions allowed by the Guidelines may differ significantly from those allowed for tax purposes.
The self&#8209;employed pay FICA tax at twice the rate that is paid by employees. At present rates, the self&#8209;employed pay fifteen and thirty one&#8209;hundredths percent (15.30%) of their gross income to a designated maximum, while employees pay seven and sixty&#8209;five one-hundredths percent (7.65%) to the same maximum. The self&#8209;employed are therefore permitted to deduct one&#8209;half of their FICA payment when calculating Weekly Gross Income.
b. Overtime, Commissions, Bonuses and Other Forms of Irregular Income. There are numerous forms of income that are irregular or nonguaranteed, which cause difficulty in accurately determining the gross income of a party. Overtime, commissions, bonuses, periodic partnership distributions, voluntary extra work and extra hours worked by a professional are all illustrations, but far from an all&#8209;inclusive list, of such items. Each is includable in the total income approach taken by the Guidelines, but each is also very fact sensitive.
When the court determines that it is not appropriate to include irregular income in the determination of the child support obligation, the court should express its reasons. When the court determines that it is appropriate to include irregular income, an equitable method of treating such income may be to require the obligor to pay a fixed percentage of overtime, bonuses, etc., in child support on a periodic but predetermined basis (weekly, bi&#8209;weekly, monthly, quarterly) rather than by the process of determining the average of the irregular income by past history and including it in the obligor's gross income calculation.
Another form of irregular income may exist when an obligor takes a part&#8209;time job for the purpose of meeting financial obligations arising from a subsequent marriage, or other circumstances. Modification of the support order to include this income or any portion of it may require that the obligor continue with that employment just to meet an increased support obligation, resulting in a disincentive to work.
c. Potential Income. Potential income may be determined if a parent has no income, or only means&#8209;tested income, and is capable of earning income or capable of earning more. Obviously, a great deal of discretion will have to be used in this determination. One purpose of potential income is to discourage a parent from taking a lower paying job to avoid the payment of significant support. Another purpose is to fairly allocate the support obligation when one parent remarries and, because of the income of the new spouse, chooses not to be employed. However, attributing potential income that results in an unrealistic child support obligation may cause the accumulation of an excessive arrearage, and be contrary to the best interests of the child(ren). Research shows that on average more noncustodial parental involvement is associated with greater child educational attainment and lower juvenile delinquency. Ordering support for low-income parents at levels they can reasonably pay may improve noncustodial parent-child contact; and in turn, the outcomes for their children. The six examples which follow illustrate some of the considerations affecting attributing potential income to an unemployed or underemployed parent.
(1) When a custodial parent with young children at home has no significant skills or education and is unemployed, he or she may not be capable of entering the work force and earning enough to even cover the cost of child care. Hence, it may be inappropriate to attribute any potential income to that parent. It is not the intention of the Guidelines to force all custodial parents into the work force. Therefore, discretion must be exercised on an individual case basis to determine if it is fair under the circumstances to attribute potential income to a particular nonworking or underemployed custodial parent. The need for a custodial parent to contribute to the financial support of a child must be carefully balanced against the need for the parent's full&#8209;time presence in the home.
(2) When a parent has some history of working and is capable of entering the work force, but without just cause voluntarily fails or refuses to work or to be employed in a capacity in keeping with his or her capabilities, such a parent's potential income shall be included in the gross income of that parent. The amount to be attributed as potential income in such a case may be the amount that the evidence demonstrates he or she was capable of earning in the past. If for example the custodial parent had been a nurse or a licensed engineer, it may be unreasonable to determine his or her potential at the minimum wage level. Discretion must be exercised on an individual case basis to determine whether under the circumstances there is just cause to attribute potential income to a particular unemployed or underemployed parent.
(4) When a parent is unemployed by reason of involuntary layoff or job termination, it still may be appropriate to include an amount in gross income representing that parent's potential income. If the involuntary layoff can be reasonably expected to be brief, potential income should be used at or near that parent's historical earning level. If the involuntary layoff will be extensive in duration, potential income may be determined based upon such factors as the parent's unemployment compensation, job capabilities, education and whether other employment is available. Potential income equivalent to the federal minimum wage may be attributed to that parent.
(5) When a parent is unable to obtain employment because that parent suffers from debilitating mental illness, a debilitating health issue, or is caring for a disabled child, it may be inappropriate to attribute any potential income to that parent.
d. Imputing Income. Whether or not income should be imputed to a parent whose living expenses have been substantially reduced due to financial resources other than the parent's own earning capabilities is also a fact&#8209;sensitive situation requiring careful consideration of the evidence in each case. It may be inappropriate to include as gross income occasional gifts received. However, regular and continuing payments made by a family member, subsequent spouse, roommate or live&#8209;in friend that reduce the parent's costs for rent, utilities, or groceries, may be the basis for imputing income. If there were specific living expenses being paid by a parent which are now being regularly and continually paid by that parent’s current spouse or a third party, the assumed expenses may be considered imputed income to the parent receiving the benefit. The marriage of a parent to a spouse with sufficient affluence to obviate the necessity for the parent to work may give rise to a situation where either potential income or imputed income or both should be considered in arriving at gross income.
2. Documenting Income. Income statements of the parents shall be verified with documentation of both current and past income. Suitable documentation of current earnings includes paystubs, employer statements, or receipts and expenses if self&#8209;employed. Documentation of income may be supplemented with copies of tax returns.
If the parties disagree on their respective gross incomes, the court shall include in its order the gross income it determines for each party. When the court deviates from the Guideline amount, the order or decree should also include the reason or reasons for deviation. This information becomes the starting point to determine whether or not a substantial and continuing change of circumstance occurs in the future.
1. Adjustment for Subsequent-born or Legally Adopted Child(ren) (Line 1A of Worksheet). T here shall be an adjustment to Weekly Gross Income of parents who have a legal duty or court order to support children (1)born or legally adopted subsequent to the birthdates(s) of the child(ren) subject of the child support order and (2)that parent is actually meeting or paying that obligation.
2. Court Orders for Prior&#8209;born Child(ren) (Line 1B of Worksheet). The amount(s) of any court order(s) for child support for prior&#8209;born children shall be deducted from Weekly Gross Income. This should include court ordered post-secondary education expenses calculated on an annual basis divided by 52 weeks.
3. Legal Duty of Support for Prior&#8209;born Child(ren) (Line 1C of Worksheet). Where a party has a legal support duty for the children born prior to the child(ren) for whom support is being established, not by court order, an amount reasonably necessary for such support actually paid, or funds actually expended shall be deducted from weekly gross income to arrive at weekly adjusted income. This deduction is not allowed for step&#8209;children. (See line 1C of worksheet)
4. Alimony or Maintenance (Line 1D of Worksheet). The amount(s) of alimony ordered in decrees from foreign jurisdictions or maintenance should be deducted from Weekly Gross Income.
1. Adjustment of Weekly Gross Income for Subsequent Child(ren). The adjustment should be computed as follows:
STEP 1: Determine the number of children born or legally adopted by the parents subsequent to the birthdate(s) of the child(ren) subject of the child support order and for whom the parent has a legal duty or court order to support. The parent seeking the adjustment has the burden to prove the support is actually paid if the subsequent child does not live in the respective parent’s household.
EXAMPLE: A noncustodial parent has a Weekly Gross Income, before adjustment, of $500.00. The custodial parent has a Weekly Gross Income, before adjustment, of $300.00. An adjustment shall be made to the parents’ respective Weekly Gross Incomes for the two (2) children born to the noncustodial parent after the birthdates(s) of the child(ren) subject of the child support order and the one (1) adopted child of the custodial parent, legally adopted after the birthdate(s) of the child(ren) subject of the child support order. The respective subsequent child adjustment to be entered on Line 1A of the Worksheet would be as follows:
Noncustodial………….$500.00 x .097 = $48.50 adjustment
Custodial……………. $300.00 x .065 = $19.50 adjustment
2. Legal Duty to Support for Prior-born Children. A deduction is allowed for support actually paid, or funds actually expended, for the children born prior to the children for whom support is being established. This is true even though that obligation has not been reduced to a court order. The party seeking the deduction bears the burden of proving the obligation and satisfaction of the obligation.
A parent should be permitted to deduct his or her portion of the support obligation for prior&#8209;born children living in his or her home. It is recommended that these guidelines be used to compute a deduction from weekly gross income.
3. Alimony or Maintenance. The final allowable deduction from Weekly Gross Income in arriving at weekly adjusted income is for alimony ordered in decrees from foreign jurisdictions or spousal maintenance. These amounts are allowable only if they arise as the result of a court order. This deduction is intended only for spousal maintenance, not for periodic payments from a property settlement although the court may consider periodic payments when determining whether or not to deviate from the guideline amount when ordering support. Refer to the discussion of temporary maintenance earlier in this commentary. (Line 1D of Worksheet).
The Basic Child Support Obligation should be determined using the attached Guideline Schedules for Weekly Support Payments. For combined weekly adjusted income amounts falling between amounts shown in the schedule, basic child support amounts should be rounded to the nearest amount. The number of children refers to children for whom the parents share joint legal responsibility and for whom support is being sought, excluding children for whom Section Two of the Post&#8209;Secondary Education Worksheet is used to determine support.
Combined Weekly Adjusted Income. After reducing Weekly Gross Income by the deductions allowed above, weekly adjusted income is computed. The next step is to add the weekly adjusted income of both parties and take the combined weekly adjusted income to the Guideline schedules for weekly support payments. In selecting the appropriate column for the determination of the basic child support obligation, it should be remembered that the number of children refers only to the number of children of this marriage for whom support is being computed, excluding children for whom a Post&#8209;Secondary Education Worksheet is used to determine support.
1. Work&#8209;Related Child Care Expense (Worksheet Line 4A). Child care costs incurred due to employment or job search of both parent(s) should be added to the basic obligation. It includes the separate cost of a sitter, day care, or like care of a child or children while the parent works or actively seeks employment. Such child care costs must be reasonable and should not exceed the level required to provide quality care for the children. Continuity of child care should be considered. Child care costs required for active job searches are allowable on the same basis as costs required in connection with employment.
1. Work&#8209;Related Child Care Expense (Worksheet Line 4A). One of the additions to the basic child support obligation is a reasonable child care expense incurred due to employment, or an attempt to find employment. This amount is added to the basic child support obligation in arriving at the total child support obligation.
Work&#8209;related child care expense is an income&#8209;producing expense of the parent. Presumably, if the family remained intact, the parents would treat child care as a necessary cost of the family attributable to the children when both parents work. Therefore, the expense is one that is incurred for the benefit of the child(ren) which the parents should share.
In circumstances where a parent claims the work&#8209;related child care credit for tax purposes, it would be appropriate to reduce the amount claimed as work&#8209;related child care expense by the amount of tax saving to the parent. The exact amount of the credit may not be known at the time support is set, but counsel should be able to make a rough calculation as to its effect.
2. Cost of Health Insurance for Child(ren) (Worksheet Line 4B). The weekly costs of health insurance premiums only for the child(ren) should be added to the basic obligation so as to apportion that cost between the parents. The parent who actually pays that cost then receives a credit towards his or her child support obligation on Line 7 of the Worksheet. (See Support Guideline 3G. Adjustments to Parent's Child Support Obligation). Only that portion of the cost actually paid by a parent is added to the basic obligation. If coverage is provided without cost to the parent(s), then zero should be entered as the amount. If health insurance coverage is provided through an employer, only the child(ren)'s portion should be added. In determining the amount to be added, only the amount of the insurance cost attributable to the child(ren) subject of the child support order shall be included, such as the difference between the cost of insuring a single party versus the cost of family coverage. In circumstances where coverage is applicable to persons other than the child(ren) subject of the child support order, such as other child(ren) and/or a subsequent spouse, the total cost of the insurance premium shall be prorated by the number of persons covered to determine a per person cost.
3. Total Child Support Obligation (Worksheet Line 5). Adding work&#8209;related child care costs, and the weekly cost of health insurance premiums for the child(ren) to the basic child support obligation results in a figure called Total Child Support Obligation. This is the basic obligation of both parents for the support of the child(ren) of the marriage, or approximately what it would cost to support the child(ren) in an intact household, excluding extraordinary health care and/or extraordinary education expenses.
Each parent's child support obligation is determined by multiplying his or her percentage share of total weekly adjusted income (Worksheet Line 2) times the Total Child Support Obligation (Worksheet Line 5).
2. Deviation from Guideline Amount. If, after consideration of the factors contained in IC 31&#820&;16&#8209;6&#8209;1 and IC 31&#820&;16&#8209;6&#8209;2, the court finds that the Guideline amount is unjust or inappropriate in a particular case, the court shall state a factual basis for the deviation and proceed to enter a support amount that is deemed appropriate.
3. Deviation from Guideline Amount. If the court determines that the Guideline amount is unjust or inappropriate, a written finding shall be made setting forth the factual basis for deviation from the Guideline amount. A simple finding such as the following is sufficient: "The court finds that the presumptive amount of support calculated under the Guidelines has been rebutted for the following reasons." A pro forma finding that the Guidelines are not appropriate does not satisfy the requirement for a specific finding of inappropriateness in a particular case, which is required in an order to deviate from the Guideline amount. For further discussion of deviation from the Guideline amount, see also the Commentary to Support Guideline 1.
The parent's child support obligation (Worksheet Line 7) may be subject to four (4) adjustments.
1. Obligation from Post&#8209;Secondary Education Worksheet. If the parents have a child who is living away from home while attending school, his or her child support obligation will reflect the adjustment found on Line J of the Post&#8209;Secondary Education Worksheet (See Support Guideline 8).
3. Weekly Cost of Health Insurance Premiums for Child(ren). The parent who pays the weekly premium cost for the child(ren)'s health insurance should receive a credit towards his or her child support obligation in most circumstances. This credit is entered on the space provided on the Worksheet Line 7 and will be in an amount equal to that entered on the Worksheet Line 4B (See Support Guideline 3E Commentary).
1. Custodial parent: Social Security benefits received for a child based upon the disability of the custodial parent are not a credit toward the child support obligation of the noncustodial parent. The amount of the benefit is included in the custodial parent’s income for the purpose of calculating the child support obligation, and the benefit is also a credit toward the custodial parent’s child support obligation.
i. Social Security Retirement benefits may, at the court’s discretion, be credited to the noncustodial parent’s current child support obligation. The credit is not automatic. The presence of Social Security Retirement benefits is merely one factor for the court to consider in determining the child support obligation or modification of the obligation. Stultz v. Stultz, 659 N.E.2d 125 (Ind. 1995).
3. The filing of a petition to modify on grounds a Social Security Disability determination has been requested will not relieve the parent’s obligation to pay the current support order while the disability application is pending. Filing of the petition to modify support may entitle the noncustodial parent to a retroactive reduction in support to the date of filing of the petition for modification and not the date of filing for the benefits. If the modification of support is granted, any lump sum payment of retroactive Social Security Disability benefits paid shall be credited toward the modified support obligation.
3. In Title IV-D cases there is no credit toward the monies owed to the State of Indiana unless the retroactive benefit is actually paid to the State of Indiana. The child’s Social Security benefits received and used by the custodial parent will not reduce or be credited against the noncustodial parent's obligation to reimburse the State of Indiana for Title IV-A or Title IV-E benefits previously paid on behalf of the children.
It is important to remember the amount of the child’s Social Security benefits that exceed the current child support order will not be reflected in ISETS as a credit toward an existing arrearage unless specified in the court order. Unless the credit is recognized in ISETS, there is a chance that an arrearage notice may be issued administratively and sanctions could be entered on that arrearage.
The Guidelines make no change in the law regarding an adjustment for Social Security Retirement benefits or Supplemental Security Income (SSI). The court has discretion to allow an adjustment to a parent’s child support obligation based on the amount of Social Security Retirement benefits paid for the benefit of the child due to that parent’s retirement. The retirement benefit is merely one of the factors that the court should consider when making an adjustment to the child support obligation. SSI is a means-tested program and the benefit is not included in either parent’s gross income. It therefore should not be considered an adjustment to either parent’s child support obligation.
In Brown v. Brown, 849 N.E.2d 610 (Ind. 2006), Social Security Disability (SSD)benefits paid to a child were clearly recognized as earnings of the disabled parent. Id. at 614. Social Security Disability benefits paid for a child are recognized as income of the disabled parent who earned the benefits and those benefits are included in the Weekly Gross Income of that parent. See Guideline 3A. It follows then that the payment received for the benefit of the child should be applied to satisfy the disabled parent’s support obligation. The child support order should state that the SSD benefit received for the child is credited as payment toward the support obligation. Any portion of the SSD benefit in excess of the current support obligation is a gratuity, unless there is an arrearage.
The language in Guideline 3.G.5.b.2. directs that the excess SSD benefit may be applied as payment toward an existing arrearage. Once the arrearage is satisfied, any portion of the SSD benefit that exceeds the current support obligation is considered a gratuity. The Guidelines also change the application of a lump sum SSD payment. SSD is, by definition, a substitution for a person’s income lost due to a recognized disability. Further, under the Social Security Act, that individual may be entitled to a lump sum benefit retroactive to the date that his or her disability occurred and that caused the disruption in earnings. This lump sum payment is unique to SSD. The Guidelines now allow the courts to apply the lump sum SSD benefits toward an existing child support arrearage if the custodial parent, as representative payee, receives a lump sum payment. This credit is appropriate without the requirement of a filing of a Petition to Modify Child Support.
The Guidelines change the law regarding the application of SSD benefits. The holding in Hieston v. State, 885 N.E.2d 59 (Ind. Ct. App. 2008) and its progeny has been superseded by this change. The rationale is that the lump sum payment is merely a method of payment applied to a past support obligation not paid. The distinction is between modification of support which changes the rate of support, e.g. from $100.00 per week to $50.00 per week, as opposed to credit for an indirect payment. Modification of a child support obligation still requires the filing of a petition for modification as set forth in Guideline 4.
The lump sum payment is a method of payment that may not be specifically authorized by express court order but which should be recognized as a payment of support. Indiana case law establishes that credit can be allowed for payments that do not technically conform to the original support decree. For example, where the obligated parent makes payments directly to the custodial parent rather than through the clerk of the court, the Supreme Court has recognized these payments when there was sufficient proof to convince a trier of fact that the required payments were actually made. O'Neil v. O'Neil, 535 N.E.2d 523 (Ind. 1989), Nill v. Martin, 686 N.E.2d 116 (Ind. 1997). Proof of the lump sum SSD benefit payment is not difficult because the Social Security award certificate is a record easily admitted into evidence as an exception to the hearsay rule under IRE 803(6) and (8) (reports of a public agency setting forth its regularly recorded activity) and trial courts are rarely burdened with an evidentiary dispute about what was paid, when or to whom, once the Social Security records are shared. By contrast, the informal arrangement disputes between parties to modify and reduce the actual amount of weekly support below that ordered in the divorce decree are actual attempts to retroactively modify the amount of support, which are prohibited. Similar to the nonconforming payment, the lump sum payment shall be applied as a credit to an existing child support arrearage.
The Guidelines exclude from the parent’s Weekly Gross Income any survivor benefits received by or for other children residing in either parent’s home based on the Social Security death benefits of a deceased parent of a prior-born child. See Commentary to Guideline 3(A).
Substantial and Continuing Change of Circumstances. Before a child support order may be modified in Indiana, it is necessary for a party to demonstrate a substantial and continuing change in circumstances that makes the present order unreasonable or that the amount of support ordered at least twelve (12) months earlier differs from the Guideline amount presently computed by more than twenty percent (20%). See IC 31&#820&;16&#8209;8&#8209;1 regarding dissolution of marriage actions or IC 31-14-11-8 regarding paternity actions. A change in circumstances may include a change in the income of the parents, the application of a parenting plan, the failure to comply with a parenting plan or a change in the expense of child rearing specifically considered in the Guidelines.
Emancipation: Support Orders for Two or More Children. In child support orders issued under these Guidelines, support amounts for two or more children, are stated as an in gross or total amount rather than on a per child basis. Absent judicial modification of the order, the total obligation will not decrease when the oldest child reaches nineteen (19) years of age, or the child is emancipated after the occurrence of other events. Parents should seek to modify child support orders when the legal obligation to pay child support terminates for any child or any child is emancipated. See Ind. Code § 31-16-6-6.
The concept of a pro rata delineation of support is generally inconsistent with the economic policy underlying the Guidelines (See "Economic Data Used in Developing Guidelines" in "Commentary9quot; to Support Guideline 1). That policy recognizes that the amount of support required for two children is about 1.5 times that required to support one child. The multiplication factor decreases as the number of children increases. If support were reduced by one half when the first of two children was emancipated, the remaining amount of support would be significantly below the Guideline amount for one child at the same parental income levels.
Parents should seek to modify or terminate a support order when a child(ren) becomes emancipated under Indiana law.
Analysis of Support Guidelines . The Indiana Child Support Guidelines are based on the assumption the child(ren) live in one household with primary physical custody in one parent who undertakes all of the spending on behalf of the child(ren). There is a rebuttable presumption the support calculated from the Guideline support schedule is the correct amount of weekly child support to be awarded. The total amount of the anticipated average weekly spending is the Basic Child Support Obligation (Line 4 of the Worksheet).
The Guideline support schedules do not reflect the fact, however, when both parents exercise parenting time, out-of-pocket expenses will be incurred for the child(ren)’s care. These expenses were recognized previously by the application of a 10% visitation credit and a 50% abatement of child support during periods of extended visitation. The visitation credit was based on the regular exercise of alternate weekend visitation which is equivalent to approximately 14% of the annual overnights. With the adoption of the Indiana Parenting Time Guidelines, the noncustodial parent’s share of parenting time, if exercised, is equivalent to approximately 27% of the annual overnights. As a result, these revisions provide a parenting credit based upon the number of overnights with the noncustodial parent ranging from 52 overnights annually to equal parenting time. As parenting time increases, a proportionally larger increase in the credit will occur.
Analysis of Parenting Time Costs . An examination of the costs associated with the sharing of parenting time reveals two types of expenses are incurred by both parents, transferred and duplicated expenses. A third category of expenses is controlled expenses, such as the 6% uninsured health care expense that remains the sole obligation of the parent for whom the parenting time credit is not calculated. This latter category is assumed to be equal to 15% of the Basic Child Support Obligation.
Controlled Expenses . This type of expense for the child(ren) is typically paid by the custodial parent and is not transferred or duplicated. Controlled expenses are items like clothing, education, school books and supplies, ordinary uninsured health care and personal care. For example, the custodial parent buys a winter coat for the child. The noncustodial parent will not buy another one. The custodial parent controls this type of expense. “Education” expenses include ordinary costs assessed to all students, such as textbook rental, laboratory fees, and lunches, which should be paid by the custodial parent. The cost of participating in elective school activities such as sports, performing arts and clubs, as well as related extracurricular activities are “optional” activities covered by the paragraph on “Other Extraordinary Expenses” in Guideline 8.
The controlled expenses account for 15% of the cost of raising the child. The parenting time credit is based on the more time the parents share, the more expenses are duplicated and transferred. The controlled expenses are not shared and remain with the parent that does not get the parenting time credit. Controlled expenses are generally not a consideration unless there is equal parenting time. These categories of expenses are not pertinent for litigation. They are presented only to explain the factors used in developing the parenting time credit formula. The percentages were assigned to these categories after considering the treatment of joint custody by other states and examining published data from the Bureau of Labor Statistics’ Consumer Expenditure Survey.
Computation of Parenting Time Credit . The computation of the parenting time credit will require a determination of the annual number of overnights of parenting time exercised by the parent who is to pay child support, the use of the standard Child Support Obligation Worksheet, a Parenting Time Table, and a Parenting Time Credit Worksheet.
If the parents are using the Parenting Time Guidelines without extending the weeknight period into an overnight, the noncustodial parent will be exercising approximately 96-100 overnights. The actual number of overnights may vary based on differing school calendars.
Parenting Time Table . The TOTAL column represents the anticipated total out-of-pocket expenses expressed as a percentage of the Basic Child Support Obligation that will be incurred by the parent who will pay child support. The total expenses are the sum of transferred and duplicated expenses. The DUPLICATED column represents the duplicated expenses and reflects the assumption that when there is an equal sharing of parenting time, 50% of the Basic Child Support Obligation will be duplicated. The Number of Annual Overnights column will determine the particular fractions of TOTAL and DUPLICATED to be used in the Parenting Time Credit Worksheet.