Is Child Support Considered Income?

Whenever tax season rolls around, it can seem like nearly every dollar you make gets a certain amount taken out by the IRS. We’re all expecting to pay a certain amount on the income we receive from our paychecks or contract work, but what about child support?

You may be surprised to learn that child support is not actually considered income. The State of California recognizes that parents have a responsibility to financially support their children. Because the income you receive (or pay) from child support goes directly to your children, you are not required to include it on your tax return or when you apply for government assistance such as food stamps or welfare. It is the government’s position that viewing child support as income means that it is being used towards items that do not directly benefit a person’s children.

You are likely relieved to learn that the IRS will not be taking a portion of your child’s financial support on your next tax return, but there may be other challenges relating to child support and income that you’re not aware of. What does the IRS consider “income”? What portion of your (or your co-parent’s) income can you expect to go towards child support? How will the government determine this and enforce it?

What Is Considered Income in California?

“Income”, by definition, is monetary gain that is typically earned through various types of work, passive means, or investments. Here are a few examples of income that is usually taxed in California:

• Wages: Earnings for work done, usually paid hourly or per task.
• Salary: Fixed payment given regularly regardless of hours worked.
• Bonuses: Additional payments for meeting goals or exceptional performance.
• Overtime: Extra pay for working beyond standard hours.
• Selling of Goods and Services: Income from selling products or providing services.
• Selling of Stocks or Other Investments: Income from selling investment assets, such as capital gains from selling stocks at a profit.
• Royalties: Payments for using intellectual property, such as a writer earning royalties from book sales.
• Interest: Income from investments in interest-bearing assets, such as interest earned from a savings account.
• Spousal Support, such as Alimony: Financial support provided to a former spouse post-divorce.

How Much Will I Pay in Child Support?

Child support in California is calculated by the family court. The court will start by looking at the income of both parents including wages, salaries, bonuses, commissions, and self-employment earnings. Other sources of income like rental income, investment gains, and retirement benefits may also be factored in. How much a parent spends on taxes will also be considered.

Once the court documents and verifies the parents’ income, the timeshare percentage is factored in. For example if one parent spends less time (and consequently, money) on their child, they will be expected to pay more towards their child through child support. 

Considering all of the information above, the court will calculate the final amount to be paid by one of the parents. To review a rough estimate of how much you can expect to pay, a child support calculator can be used.

How Child Support Is Enforced in California

The California Department of Child Support Services (DCSS) employs various mechanisms to enforce child support orders and hold noncustodial parents accountable for their financial obligations. Enforcement measures include income withholding, where child support payments are automatically deducted from the noncustodial parent’s paycheck by their employer and sent directly to the California State Disbursement Unit.

Additionally, the state can intercept tax refunds, suspend driver’s licenses, and report delinquent parents to credit bureaus. Other enforcement tools include placing liens on property, seizing bank accounts, and initiating contempt of court proceedings for noncompliance.

When Does Child Support End in California?

In California, child support typically ends when the child reaches the age of 18 and has graduated from high school. However, if the child is still attending high school full-time, child support may continue until the age of 19. Additionally, child support may continue beyond these ages if the child is incapacitated or disabled and unable to support themselves.

It’s important to note that child support orders may specify a different end date based on individual circumstances or agreements between the parents. Once the child support obligation ends, the paying parent is no longer required to make payments unless otherwise specified by a court order or agreement.

What Should I Do If I Have Questions about Child Support?

So, is child support considered income? The answer according to the IRS is no. But when it comes to determining how much the court will order you to pay based on your income, accurately representing your financial position in court, and challenging enforcement methods used by the DCSS, you’ll almost certainly need the help of a skilled divorce attorney who is familiar with family law.

Pinkham & Associates is an experienced and compassionate family law firm that has been serving Orange County for over 25 years. Our team prides itself on our effective ability to represent our clients in the often challenging and confusing family court system. If you need help with a divorce or child support hearing or simply have questions about your particular case, call our firm at (714) 730-0111 or use our online contact form.