North Carolina Child Support Definitions
Monthly Gross income:
Gross income includes income from any source, except as excluded below, and includes but is not limited to income from salaries. wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers compensation benefits, unemployment insurance benefits, disability pay and insurance benefits, gifts, prizes and alimony or maintenance received from persons other than the parties to the instant action. While includable as income, non-recurring, one-time payments should be distinguished from ongoing income.
Specifically excluded are benefits received from means-tested public assistance programs, including but not limited to Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), Food Stamps and General Assistance.
Payments received for the benefit of the child(ren) as a result of the disability of the obligor are not considered in determining the amount of the basic child support obligation. However, after determining the amount of obligor’s support obligation under the Guidelines, the Court should compare the obligor’s support obligation under the guidelines with the benefits received by the child(ren) due to the obligor’s disability, and determine whether an award of child support in addition to the child(ren) disability-related benefits is warranted.
Income from self-employment or operation of a business:
For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, gross income is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation. Specifically excluded from ordinary and necessary expenses for purposes of these Guidelines are amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, Investment tax credits, or any other business expenses determined by the Court to be inappropriate for determining gross income for purposes of calculating child support In general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases, this amount will differ from a determination of business income for tax purposes.
Expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business should be counted as income if they are significant and reduce personal living expenses. Such payments might include a company car, free housing, or reimbursed meals.
If a parent is voluntarily unemployed or underemployed, child support may be calculated based on a determination of potential income, except that a determination of potential income should not be made for a parent who is physically or mentally incapacitated or is caring for a child who is under the age of three years and for whom the parents owe a joint legal responsibility.
Determination of potential income shall be made by determining employment potential and probable earnings level based on the parent’s recent work history, occupational qualifications and prevailing job opportunities and earning levels in the community. If the parent has no recent work history and/or vocational training, it is suggested that the Court determine potential income in an amount not less than the minimum hourly wage for a 40-hour work week. In each case, the Court should consider the prior circumstances of the parties in determining whether or not to impute income.
Pre-existing Child Support Obligations and Financial Responsibility for Other Child(ren):
The amount of child support payments actually made by a party under any pre-existing court order(s) or separation agreement(s) should be deducted from the party’s gross income. Actual payments of alimony should not be considered as a deduction from gross income but may be considered as a factor to vary from the final presumptive child support obligation.
The amount of a party’s financial responsibility (as determined below) for his or her natural or adopted child(ren) currently residing in the household who are not involved in this action should be deducted from gross income. Use of this deduction is appropriate at the time of the establishment of a child support order or in a proceeding to modify an existing order. However, in a proceeding to modify, it may not be the sole basis for a reduction.
The deduction for a party’s financial responsibility for other child(ren) is one-half of the basic child support obligation for the number of child(ren) who live with the party and for whom the party owes a duty of support (other than the child(ren) involved in the instant action). For purposes of this deduction, the
basic child support obligation for the other child(ren) living with the party is based on the combined adjusted gross incomes of the party and the other responsible parent of such child(ren).
Work Related Child Care Costs:
Reasonable child care costs incurred due to employment or job search are added to the basic obligation as follows:
(1) When the gross monthly income of the party paying such costs falls below the level indicated below, 100% of child care costs are added.
I child - $1,100
2 children - $1,500
3 children - $1,700
4 children - $1,900
5 children - $2,100
6 children - $2,300
At these income levels, the party paying child care costs does not benefit from the tax credit for child care.
(2) When the income of the party exceeds the level indicated above, 75% of child care costs are included since the party would be entitled to the income tax credit for child care expenses.
Health Insurance Premiums:
The cost of health (medical, or medical and dental) insurance for the child(ren) due support is added to the basic child support obligation. The amount included in the child support calculation is the amount of the health insurance premium actually attributable to the child(ren) subject to the order. If this amount is not available or cannot be verified, the total cost of the premium is divided by the total number of persons covered by the policy and then multiplied by the number of child(ren) covered by the policy who are subject to the order.
If coverage is provided through an employer, only the employee’s portion of cost should be considered. Medical or dental expenses in excess of $100 per year and uncompensated by insurance should be divided between the parties in proportion to their respective incomes.
The Court may make adjustments for extraordinary expenses and order payments for such term and in such manner as the Court deems necessary. Extraordinary medical expenses are uninsured expenses in excess of $100 for a single illness or condition. Extraordinary medical expenses include, but are not limited to, such costs as are reasonably necessary for orthodontia, dental treatments, asthma treatments, physical therapy and any uninsured chronic health problem. At the discretion of the Court. professional counseling or psychiatric therapy for diagnosed mental disorders may also be considered as an extraordinary medical expense. Payments for such expenses shall be apportioned in the same manner as the basic child support obligation and ordered paid as the Court deems equitable.
Other extraordinary expenses are added to the basic child support obligation.
Other extraordinary expenses include:
(1) Any expenses for attending any special or private elementary or secondary schools to meet the particular educational needs of the child(ren); (2) Any expenses for transportation of the child(ren) between the homes of the parents.