In Illinois, the child support guidelines changed dramatically in 2017. Before July 1, 2017, in Illinois child support had been based on a simple percentage of net income depending on the number of children. Since 2017, Illinois has followed our income sharing approach that considers the net income of both parents. This has radically changed child support awards in Illinois divorce and paternity cases.
Child support can be set at a lower or higher amount (known as a deviation) and often the court may require the parent to contribute to some of the children’s health care, child care, education and extracurricular expenses.
In an Illinois divorce or paternity suit, is the amount to be paid for child support predictable?
With the passage of Pub. Act 100-15, there is greater predictability in child support awards based upon the income sharing amendments. On the other hand, the current Illinois income sharing amendments present a host of potential problems making it necessary for individuals to consult with a lawyer knowledgeable in the law and the potential impact on one’s individual situation.
Is “net income” the same as take home pay?
No. The new law allows is complex and allows for the use of either a “standardized” or “individualized” tax calculation.
How is net income now determined in Illinois divorce and paternity cases?
There are two approaches to determine net income under the income sharing law for child support in Illinois. The first approach uses a “standardized tax amount” and the second approach uses an “individualized tax amount.”
Explain how the standardized tax amount works:
Determine Federal and State taxes not based on the actual amount paid in taxes but assuming one would file as a single person claiming the standard deduction with one personal exemption (yourself) and the number of dependency exceptions for the minor children. Also, deduct social security and Medicare taxes. See: Chart for Conversion of Gross to Net Income.
The 2019 income conversion table assumes the parent with a duty to support claims one allowance (for self) and the recipient parent claims two allowances (for self and head of household) regardless of the number of children. The 2019 W-4 form eliminated the line for claiming children as exemptions. (The 2018 W-4 form included it.) However, the 2019 W-4 form provides an additional allowance for head of household.
Does the Standardized Tax Table Consider which parent is allocated the under age 17 child tax credit?
No. The allowances for the child tax credit were not included in the conversion tables. The calculation of the allowance is complicated. The number of the children and the amount of the annual income effect the value significantly. This is but one reason why individualized tax amounts should be used as a rule.
What’s this about an “Individualized Tax Amount”?
This approach uses the actual taxes that are paid rather than just assuming standard deduction, etc. It is a more accurate approach and will be used in higher income cases to be fairer to each party. This approach considers all relevant tax attributes such as filing status, the actual allocation of the dependency exemptions, and whether a party claims the standard or itemized deductions.
Is income from overtime, second jobs, bonuses, commissions, etc. considered “income?”
This should be considered but doing so is far more complex under the income sharing amendments. This is because the guidelines consider the income from both parents. Current Illinois law provides:
“[G]ross income” means the total of all income from all sources, except “gross income” does not include:
(i) benefits received by the parent from means-tested public assistance programs, including, but not limited to, Temporary Assistance to Needy Families, Supplemental Security Income, and the Supplemental Nutrition Assistance Program or
(ii) benefits and income received by the parent for other children in the household, including, but not limited to, child support, survivor benefits, and foster care payments.
I am self employed and have overhead expenses. Can I deduct from my gross income all of my overhead expenses?
The answer changed in 2017. Prior to this, the advice given was to run the business like a business and to keep personal items separate from business expenses. This remains good advice. But under our current income sharing legislation, Illinois law is more sensible and allows a self-employed person to deduct business expenses.
Illinois law provides:
Business income. For purposes of calculating child support, net business income from the operation of a business means gross receipts minus ordinary and necessary expenses required to carry on the trade or business. As used in this paragraph, “business” includes, but is not limited to, sole proprietorships, closely held corporations, partnerships, other flow-through business entities, and self-employment. The court shall apply the following:
(A) The accelerated component of depreciation and any business expenses determined either judicially or administratively to be inappropriate or excessive shall be excluded from the total of ordinary and necessary business expenses to be deducted in the determination of net business income from gross business income.
(B) Any item of reimbursement or in-kind payment received by a parent from a business, including, but not limited to, a company car, reimbursed meals, free housing, or a housing allowance, shall be counted as income if not otherwise included in the recipient’s gross income, if the item is significant in amount and reduces personal expenses.
Under the Income Sharing Amendments, how far will the charts go up for the net income?
The charts go up to $360,000 of net income per year ($30,000 per month.). Once net income exceeds $360,000 annually, the presumptive minimum basic award of support is not less than the highest level of support set forth in the charts. The court has discretion in these cases other than setting support at the highest level per the support guideline tables.
In addition to child support, can the child support obligor be required to pay other expenses of the children?
Yes. The usual add-ons to the basic child support obligation are reasonable:
- Reasonable school expenses;
- Extracurricular activity expenses.
The other add-ons are allocated between the parents include;
- Child care expenses;
- Health care needs not covered by insurance.
The July 1, 2017, law is complex regarding the issue of the allocation of child care expenses, health care needs and health insurance. Advice from counsel is necessary to address the requirements of our new statutory law.
Does child support stop at age 18 of a child?
Not necessarily. The law provides that support generally terminates at age 18 or of a child is still attending high school up to age 19. It is important to consult with a lawyer when child support is to terminate.
If my income fluctuates, will my child support be based on an average of past income?
Child support is often based on current income (year-to-date earnings) projected to year end when an individual receives a steady pay-check but the amount has risen in the last year. The income tax returns for the last few years will often demonstrate whether or not there are bonuses or other variable income.
If, however, the child support obligor’s income fluctuates significantly from year to year, there had been two approaches: the base plus percentage approach and an income averaging approach. Under our current income sharing law for child support, things have become more complicated. Our Illinois income sharing amendments consider the income of both parents. And the percentage differs depending upon the income–with relatively higher percentages being paid at lower income levels and lower percentages being paid at higher levels. Because of these complicating factors, an income-averaging approach is being used with greater frequency. An income averaging approach often uses the average income over a period such as the last three years, so long as those years are representative of likely future income.
Proactive advice from an experienced matrimonial lawyer in this regard is essential.
Must child support be payroll deducted?
Child support must be withheld from the obligor’s employment income and paid through the State Disbursement Unit (SDU) if the recipient is receiving public aid, or the support payments are made through income withholding. There is an exception in cases where there is a signed written agreement providing “an alternative arrangement, approved and entered into the record by the court, which ensures payment of support.”
