In today’s Divorce Academy video, Kevin discusses how to calculate child support in Texas.
Video Transcript:
Hi everyone. Welcome to Divorce Academy. I’m Kevin Handy. I’m one of the divorce mediators here at SnapDivorce.
In today’s video we’re going to talk about how child support is calculated in Texas. So, if you’re separating in Texas and you’ve got kids this video is going to be for you. We’ll cover pretty much everything that you need to know about child support. We’re going to talk about who pays child support, how incomes for determining child support are determined, what the formula is in Texas, can you agree to pay less child support or more child support in Texas, and what are the factors for deviation. And, of course then we’ll also talk about can you modify child support in Texas? So, we’re going to cover pretty much everything that you need to know about child support.
So, let’s get started. The first question is, of course, who pays child support in Texas? The person who pays child support is going to be the non-custodial parent. What does that mean? It means the parent who has the least amount of custody time with the children. So, if you have less than 50% of the time with the children you’re going to be the one who pays child in Texas.
The person who pays child support is going to be called the payor or the obligor, and the person who receives child support is going to be known as the payee or oblige.
With the non-custodial parent paying child support one question that comes up a lot is what about a 50/50 custody schedule? What if we’ve got evenly split custody? Well in Texas it’s fairly uncommon. The Texas rules and everything kind of push one parent to have primary custody another parent to have partial custody. It’s kind of unfortunate because the research shows that equally shared custody schedules actually best for the parents children.
You can have an equal shared custody schedule in Texas. It does come up. Typically, if the parties are mediating the case, or coming to an agreement, you could come to a 50/50 custody schedule. In those cases, it’s going to be the higher earner who pays child support. And it probably won’t be quite pursuant to the formula, but we’ll talk about that later.
Alright, so how is child support determined Texas?
Well, the amount of child support in Texas is determined by a formula and that formula has two key components. Number one is the net income of the payor the person who’s going to be paying child support. And the number of children that the order is going to cover. Interestingly the obligor, or the person who’s receiving child support, their net income . . . it’s not relevant. So theoretically you could have a party who’s making say $40,000 a year and a payee who’s making $1,000,000 a year and that’s going to be irrelevant. So, the person making $40,000 is still going to have to pay the person making $1,000,000 a year child support if that person has primary custody of the children. Now, it’s kind of an extreme example, and you could argue for a deviation, but I just want to throw out there that the payee’s income is not relevant to the formula in Texas.
Alright, how is net income determined? So, obviously, you’re going to have to determine the payor’s net income.
So, the first step is to determine what is the payor’s gross income. And that’s going to be basically income from any source derived. So, typically, you’d be looking at wages. If there is a business at business income. There could be income from investments or rental properties. Any income that the payor is earning during the year is going to be counted towards gross income. In some unusual circumstances you could even throw in assets that are not producing income now.
One question that does come up pretty often is, what if the what if the payor is not working to his or her ability? You know a lot of times you’ll see people once they separate, and they know they’re going to have to pay child support, they’ll maybe quit their job or stop working as much. Well in those circumstances then the court will determine what the payor’s earning capacity is. So, for example, if someone quits their job the courts going to look and say, hey, you know what, we think you could get a job and we think you could get a job making $80,000 a year. And they’re going to assign an earning capacity to the payor, and they’ll use that number to calculate child support.
So once gross income is determined, and they’ll do this on an annual basis, once gross income is determined on annual basis, then you have to come up with net income. And there’s only a couple things to subtract in Texas from gross income to get some net income. Those are federal taxes, Social Security, and union dues. That’s it. So federal taxes, Social Security, and unions dues. Voluntary deductions from paychecks, such as 401(k) contributions, they’re going to get added back in. They don’t count towards the calculation of net income. So, once you’ve determined gross income, subtract taxes, Social Security, and union dues you get to net income on an annual basis. And then you divide that by 12 and you get to a monthly net income. And once you’ve got that number, you can apply the formula to determine how much child support is going to be.
Before it gets that we’re going to take a quick break. When we come back, we’re going to talk about the formula, how that works, number two, we’re going to talk about deviations from the formula, and can you agree to pay lesson in child support taxes?
OK we’re back. So, let’s get to the really interesting stuff. So how does the formula work in Texas? So, the formula it’s actually pretty simple. Again, remember, I told you earlier on it’s based on net income and number of children. So, the formula in Texas is if you have one child subject to the order it’s going to be 20% of net income, two children 25%, three children 30%, four children is 35%, and four children is 40%. Yeah, sorry, five children is 40%, So, and then if you have 6 plus children, it’s going to be at least 40%.
For example, let’s say the payor is making $4,000 a month net and there’s two children subject to the order. 25% of $4000 is going to be $1,000. That’s going to be what the order is per month. Now there is a limit in Texas to how much the formula is going to apply to and that goes up to $9,200 monthly net. So, once you are over $9,200 monthly net the formula is not going to be applicative, and there’s really not going to be more child support. Now, you can argue that there should be more pursuant to deviations, but the formula doesn’t dictate anymore child support.
OK so next question comes up, and this comes up a lot in mediation, can you agree to pay less? Well, it’s really frowned upon to have agreements that pay less than the formula dictates in Texas. The court is going to want to look at what is in the best interest of the children. So, if you have an agreement to pay less, you’re going to have to prove to the court that it’s in the best interest of the children. Now, you can argue, “hey we have a 50/50 custody . . . the non-custodial parent is going to pay for these other expenses like daycare or maybe private school tuition.” So, if you show that that there’s an agreement and an order to pay child support that’s less than the formula, but it’s in the best sense of children, there is a good chance that court would accept that. And, again, this comes up a lot in mediation because in mediation there tends to be, you know, agreements that the parties are trying to work out themselves.
Aright, deviations are the next big thing. I kind of mentioned this earlier when I talked about, you know, the theoretical payee making $1,000,000 per year. Alright, so it starts out with the presumption that is that the formula is appropriate. So, again, based on the payor’s net income and the number of children. But you can argue to deviate. It can go up or it can go down. And I’m just going to give you a few of the reasons for deviation. There’s a lot of them. Pretty much anything you can think of – any good reason you can think of. But just some of the general ones are ages and needs of the children; whether the custodial parent can support the child . . .you know if the child support number happens low and maybe the custodial parent isn’t working, maybe they don’t have enough money to support the child, so you could argue for a deviation upward; the financial resources or parties. Now go to example the person . . maybe the payee or oblige is making $1,000,000 per year maybe they don’t need that much child support so maybe argue for deviation downward, especially if the payor has substantial custody. The amount of time the non-custodial parent spends with child. Again, going back to maybe a 50/50 schedule you argue for deviation downward.
Childcare costs. Interestingly, in Texas childcare costs are not a separate add on to the formula. In other states like Pennsylvania and New York, they calculate first basic child support and then you look at, “hey does the custodial parent have to put the children in daycare or preschool in order to work?” And, if so, the two parents have to split the daycare costs pursuant to their relative incomes. That’s not the case in Texas. The presumption is that the formula amount of child support should be used by the obligee to pay for childcare.
But you know childcare is pretty expensive. So, you know, I mean if you’ve got children, you are probably talking a $1,000, $1,200 a month per child for child care, so it can get really pretty expensive pretty quickly. So, I think childcare cost is a good place to argue for a deviation. I sort of hinted at this before. Courts historically wouldn’t do a deviation because the idea was that, well that’s included in the basic child support number, but I think they’re becoming more receptive to that. And I just put etcetera. It’s kind of any good reason you can think of for deviation.
Alright, so modification. Once a child support order is in place in Texas it typically stays in place. Now you can go back to court and ask for a modification for, number one, would be a substantial change in circumstances. What would that be? Maybe it could be a change in the custody schedule. Maybe one person is getting more custody time and the other person is getting less. Change in income. Maybe someone got a big raise or maybe someone lost their job. So, there are reasons you could come back to court to look for a modification.
You can also get a modification every three years if the presumptive amount of child support deviates from the existing order by 20% or $100. So, with $100 it’s really not that much. Kind of every three years you can kind of come back, reassess what the child support number should be.
That pretty much covers how child support is calculated Texas. But before you I just want to mention two things. First, I’m going to be doing another video about how a child custody is determined in Texas. So, again, if you’ve got kids and you’re separating you’re going to want to listen to that Divorce Academy video. Number two, at SnapDivorce we’ve got this great new podcast called the Divorce Rulebook Podcast and if you’re get divorced, I highly recommend listening to those podcasts. Myself and another really experience attorney, Pat Cooley, talk about every issue that you can imagine that you have to deal with in divorce — How do you get started? How is marital property to divided? How do you find an attorney or a good mediator? So, I highly recommend you listen to the podcast if getting a divorce. You can find it at http://snapdivorce.com/podcast. It’s also available on iTunes, Spotify, Amazon podcast, pretty much anywhere you can find podcasts. So I recommend you listen to that podcast.
That pretty much wraps it up for today. I hope this video was helpful and I’ll see you next time on Divorce Academy. Thank you.
