Minnesota Divorce and Family Law Blog

Joint Custody and Child Support

Under the Minnesota child support law that has been in effect since 2007, the amount of child support is based on both parents' incomes.  There is a guideline table in the statute that provides a set amount of base support that a child or children are entitled to based upon the sum of mom's income and dad's income.  The amount of the payor parent's obligation is figured by that parent's proportional share of the two parents' combined income applied to the base support in the aforementioned guideline table.  

If the parents have equal, or nearly equal, parenting time (i.e., if the child's living arrangement reflects joint physical custody), the calculation is different (...and too complicated to explain in brief space here.) Suffice it to say, the payor parent's obligation is substantially less.

The joint custodian's lower child support obligation reflects the fact that the joint custodian is contributing to regular, daily expenses in a manner that a non-custodial payor parent does not.  That is to say that, in the first example above, the obligor parent pays child support to the custodial parent, and the custodial parent covers the child's expenses, including clothing, footwear and regular, extracurricular activities.  (The payor parent does cover incidental expenses during parenting time, such as food, movie tickets and travel expenses.)  In the second example above, the joint custodian pays a LESSER amount of child support, but also contributes to the child's expenses, such as clothing, footwear and extracurricular activities (and not just parenting time expenses).  

There are times when a payor parent views it as a "bad deal" to pay the "higher" amount of child support. The up side is not having to contribute additionally to day-to-day expenses.  Conversely, the "down" side of paying the "lower" amount of support that a joint custodian pays is having to also contribute to day-to-day expenses.  

Parenting Expense Adjustment to Child Support

The current Minnesota child support law factors into its calculations the fact that the child support obligor incurs expenses when caring for the child(ren).  The child support statute provides a parenting expense adjustment in which the basic support calculated based upon the income of the two parents is reduced by twelve percent (12%).  The adjustment applies to all cases except those in which the payor parent has (a) very little access to the child, or (b) access to the child that is nearly equal to the other parent.  As long as the child spends between ten percent (10%) and forty-five percent (45%) of time with the payor parent, the 12% reduction applies. (As an example, a non-custodial parent who has parenting time one day per week, or alternating weekends, meets the 10% threshold.)  The applicable parenting schedule must be in a written court order in order for the parenting expenses adjustment to be implemented.

If the payor parent has the child(ren) in his or her care for more than 45% of the time, a very different calculation of child support applies.  In these cases, the custodial arrangement is commonly termed "joint physical custody," because the child spends substantial residential time in each home.  In those cases, generally the child support obligation is substantially less than it would otherwise be.  However, in such circumstances, it is expected that the payor parent will contribute directly to other expenses of the child(ren), such as clothing and extracurricular activities. Such a living arrangement for the child(ren) would reflect that the parties have the ability to cooperate in co-parenting, and therefore to also cooperate in fairly incurring and allocating the parenting expenses.   

Parenting Rights and Responsibilities

As a parent, you have the right to custody of, or parenting time with, your child; and the responsibility to financially support your child. Many divorced or separated parents believe that if a parent fails to pay child support, they are not entitled to see the child; or if they do not have the opportunity to see their child, then they should not have to pay child support.

In formal family court proceedings, a parent's child support payment record and a parent's right to see the child are not connected. I have heard many family court judges say that you cannot "buy" the right to see your child. The family court considers parenting time to the child's right, as much (or more) as it is the parent's right. The child has no control over whether child support is on time, adequate, or set at too high a level. Regardless of the financial circumstances, the child and the parent have the right to see each other.

When a parent's access to a child is restricted, it will not be for financial reasons, but reasons of personal safety and well-being of the child. So, in cases in which the parent's access is restricted, the child is still entitled to financial support. Again, the family court will consider financial support to be the child's right, regardless of whether the child has regular contact with the non-custodial parent. If one of the parent's access to the child is restricted for some reason, that is not the fault or responsibility of the child.

Outside of court, parents may use the child as a way of getting money, or use money as a way of getting to see the child. Given that family court is where parents go to appeal to the court to remedy their situation, it is important to know that the family court will not engage in the tit-for-tat concept with child support and parenting time.

Taxable Alimony, Nontaxable Child Support

The tax consequences of child support and alimony (spousal maintenance) are different.  Child support has no tax consequences, which is to say that child support is not taxable to the recipient, and not deductible from the income of the payor.  Typically, however, spousal maintenance is taxable to the recipient, and deductible from the taxable income of the payor. 

If a court order provides for one party to pay child support of $1,500 per month, and maintenance of $750 per month, on paper that combines to be $2,250.  Assume that one's combined state and federal taxes are at a rate of 33% of total income.  Since the payor will save approximately $250 on taxes (due to deducting the $750 from taxable income) and the receiver will incur approximately $250 in taxes (due to including the $750 in taxable income), the net amount of the $2,250 in combined payments is closer to $2,000.

If the court order instead provides for the party to pay child support of $750 per month, and maintenance of $1,500 per month, on paper that combines to be the same $2,250.  But the net amount is closer to $1,750, due to the approximately $500 in tax on the $1,500 in maintenance.

Moreover, if the party paying the support and maintenance is in a higher tax bracket than the party receiving the payments, the parties can mutually enjoy a net benefit.  Assume that the payor is in a tax bracket that results in a 33% tax liability, and the receiver is in a tax bracket that results in a $20% tax liability.  In the first example above, if the payor saves $250 on tax, the net effect to the payor is a combined expense of $2,000.  At the same time, the receiver may incur tax of only $150, so that the net effect to the receiver is a combined receipt of $2,100.  Together, the parties save $100 per month in taxes.

The net benefit increases with the second example ($750 child support, $1,500 maintenance).  If the payor saves $500 on taxes, the net expense is $1,750.  But if the receiver incurs tax of only $300, the net receipt is $1,950.  Together, the parties save $200 per month in taxes. 

Family Law Prologue

Greetings from St. Paul, Minnesota. Having returned to my office after a week away, this is my opportunity not only to dive back into working on divorce and family law cases, but also to dive into the world of blogging.

As a family law attorney, I spend a great deal of my time answering people's questions. That is an obvious and important part of rendering legal advice to a client in the midst of a divorce or child custody dispute, or arguing a case in family court. Other attorneys will often post questions on listserves that have recently popped up on the internet, and friends and family members will often pick my brain about family law issues that they have encountered, or just out of plain curiosity. This blog is meant to serve as a place to post questions and answers on important family law issues.

It is my hope that this blog will serve as a helpful resource on the subject of Minnesota divorce and family law. Please feel free to post a question (with due regard for the disclaimer on the sidebar) by clicking on the comments link below.