Taxes affect the calculation of child support and therefore the issue based upon the income shares legislation about whether we base child support on gross income or net income will have a significant effect. Key language in the income shares legislation was a compromise allowing the critical tax calculations to be included in appropriate cases.
The legislation provides:
(B) As used in this Section, “net income” means gross income minus either the standardized tax amount calculated pursuant to subparagraph (C) of this paragraph (3) or the individualized tax amount calculated pursuant to subparagraph (D) of this paragraph (3), and minus any adjustments pursuant to subparagraph (F) of this paragraph (3). The standardized tax amount shall be used unless the requirements for an individualized tax amount set forth in subparagraph (F) of this paragraph (3) are net.
Next, it provides:
(C) As used in this Section, “standardized tax amount” means the total of federal and state income taxes for a single person claiming the standard tax deduction, one personal exemption, and the applicable number of dependency exemptions for the minor child or children of the parties, and Social Security tax and Medicaid tax calculated at the Federal Insurance Contributions Act rate.
(I) Unless a court has previously determined otherwise or the parties otherwise agree, the custodial parent shall be deemed entitled to claim the dependency exemption for the parties’ minor child or children.
(II) The Department of Healthcare and Family Services shall promulgate a chart that computes net income by deducting the standardized tax amount from gross income.
Whether to use “standardized tax” or “individualized tax amount” will likely prove to be a critical issue in certain Illinois divorce cases commencing July 1, 2017.