Child Support

Whether you are a divorced parent or a never married parent of a minor child, your child has a legal right to receive child support from both parents. Under Illinois law, the non-custodial parent is required to pay child support to the custodial parent. The Illinois Marriage and Dissolution of Marriage Act provides guidelines to calculate support obligations as follows:

  • one child: 20% of net income
  • two children: 28% of net income
  • three children: 32% of net income
  • four children: 40% of net income
  • five children: 45% of net income
  • six or more children: 50% of net income

Although the above percentages are guidelines, the Judge will only deviate from these guidelines in rare cases. Child support is ALWAYS modifiable. A child support order entered at the time of the divorce is, almost definitely, going to be revised every couple of years as the needs of the children change and as the income of the non custodial parent fluctuates.

Child support is not only the provision of funds for food and clothing. Child support is intended to provide funds for those things plus housing, transportation, activities, medical care, etc. In addition, to child support, the non-custodial parent is often required to contribute additional funds for daycare, extracurricular activities, private school expenses and medical expenses not covered by insurance.

A common misconception is that child support will not be paid if the parties are awarded joint custody of the children. This is simply not true. As a general statement, in cases where joint custody is appropriate, one party will be designated as the residential parent. As such, the child's legal address will be the same as the residential parent. The other parent will be required to pay child support to the residential parent. The right to child support belongs to the child, and neither the parents nor the Court has the authority to waive that right.

Child support is yet another area where needs grow and change. Child support is often the subject of post decree litigation since the children are entitled to an increase in support as the parent's income increases. Conversely, if a parent's income decreases, a decrease in child support may be appropriate.

Child support is not includible in the income of the receiving spouse, nor deductible from the income of the payor. However, when alimony and child support are being paid, it is possible to make the entire amount income to the receiving spouse and deductible for the payor. This is called unallocated family support and there are strict IRS regulations governing its use. However, when unallocated support is properly calculated it can result in more money for both spouses. At Isabel M. Millard, PC, we always consider every alternative to traditional child support and work closely with our clients to create support arrangements that afford each spouse the maximum benefit possible.

A comparison of: Child support plus alimony
and Unallocated family support.

The assumptions underlying this example are as follows:

  • Husband earns $ 100,000 per year and is not self-employed.
  • Wife is a full-time homemaker and does not earn any outside income.
  • 3 children, all under age 17, all residing with the Wife.
  • Wife deducts $ 10,000 in mortgage interest and $ 4,000 in property tax payments each year.
  • Husband has no mortgage interest or property tax deductions. (If Husband does have
    similar deductions, it will only improve his cash flow).
  • Statutory child support is 32% of the Husband's net income: $ 21,869/year or $ 1,822/month. These payments are nondeductible by Husband and not includible in Wife's income.
  • Maintenance is $ 7,000/year or $ 583/month. These payments are entirely deductible by Husband and entirely includible in Wife's income.

    *Unallocated support is $ 40,000/year or $ 3,333/month. These payments are entirely deductible by Husband entirely includible in Wife's income.

    *How can Husband possibly afford to pay $ 3,333/month!? He increases his exemptions. Call us to discuss unallocated support in detail.

  Child support
...($ 1,822/mo.)
+ Maintenance
...($ 583/mo.)
Unallocated Family
Support ($ 3,333/mo.)
Husband's after-tax cash $ 3,482/mo. $ 3,483/mo.
Wife's after-tax cash $ 2,406/mo. $ 3,146/mo.
Husband's % share of income 59% 52%
Wife's % share of income 41% 48%
Husband's marginal tax rate 33% 30%
Wife's marginal tax rate 12.7% 17.6%
Husband's total taxes paid $29,349 $18,921
Wife's total taxes paid $ 0 $ 2,246

Net results of using unallocated family support:

No change in Husband's after-tax cash each month
Wife and children have $ 740 MORE after-tax cash each month
Husband's marginal tax rate is reduced 3% and Wife's marginal tax rate is reduced 5%
Combined, Husband and Wife save $ 8,182 in taxes.

Contact us at Isabel M. Millard, PC to discuss support obligations in greater detail.

 

 

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Isabel M. Millard, PC
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Elmhurst, Illinois 60126
Phone: 630-279-2229
Fax: 630-279-2252
imm@illinois-collaborative-law.com


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