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Texas Child Support Definitions

DEFINITIONS:

Net Resources:

(a) The court shall calculate net resources for the purpose of determining child support liability as provided by this section.
(b) Resources include:

(1) 100 percent of all wage and salary income and other compensation for personal services (including commissions, overtime pay, tips, and bonuses);
(2) interest, dividends, and royalty income;
(3) self-employment income
(4) net rental income (defined as rent after deducting operating expenses and mortgage payments, but not including noncash items such as depreciation); and
(5) all other income actually being received, including severance pay, retirement benefits, pensions, trust income,
annuities, capital gains, social security benefits,
unemployment benefits, disability and workers’ compensation benefits, interest income from notes regardless of the source, gifts and prizes, spousal maintenance, and alimony.

(c) Resources do not include:

(1) return of principal or capital;
(2) accounts receivable; or
(3) benefits paid in accordance with aid for families with dependent children.

Application of Guidelines to Net Resources of More
Than $6,000 Monthly:

(a) If the obligor’s net resources exceed $6,000 per month, the court shall presumptively apply the percentage guidelines to the first $6,000 of the obligor’s net resources. Without further
reference to the percentage recommended by these guidelines, the court may order additional amounts of child support as
appropriate, depending on the income of the parties and the
proven needs of the child.
(b) The proper calculation of a child support order that
exceeds the presumptive amount established for the first $6,000
of the obligor’s net resources requires that the entire amount of
the presumptive award be subtracted from the proven total needs of the child. After the presumptive award is subtracted, the court shall allocate between the parties the responsibility to
meet the additional needs of the child according to the
circumstances of the parties. However, in no event may the
obligor be required to pay more child support than the greater of
the presumptive amount or the amount equal to 100 percent of the
proven needs of the child.

Health Insurance for Child Presumptively Provided by Obligor:

The guidelines for support of a child are based on the
assumption that the court will order the obligor to provide
health insurance coverage for the child in addition to the amount
of child support calculated in accordance with those guidelines.

Self-Employment Income:

(a) Income from self-employment, whether positive or negative, includes benefits allocated to an individual from a business or undertaking in the form of a proprietorship, partnership, joint venture, close corporation, agency, or independent contractor, less ordinary and necessary expenses required to produce that income.
(b) In its discretion, the court may exclude from
self-employment income amounts allowable under federal income tax law as depreciation, tax credits, or any other business expenses shown by the evidence to be inappropriate in making the determination of income available for the purpose of calculating child support.

Deemed Income:

(a) When appropriate, in order to determine the net resources
available for child support, the court may assign a reasonable
amount of deemed income attributable to assets that do not
currently produce income. The court shall also consider whether
certain property that is not producing income can be liquidated
without an unreasonable financial sacrifice because of cyclical
or other market conditions. If there is no effective market for
the property, the carrying costs of such an investment, including
property taxes and note payments, shall be offset against the
income attributed to the property.
(b) The court may assign a reasonable amount of deemed income to income-producing assets that a party has voluntarily
transferred or on which earnings have intentionally been reduced.

Intentional Unemployment or Underemployment:

If the actual income of the obligor is significantly less than
what the obligor could earn because of intentional unemployment or underemployment, the court may apply the support guidelines to the earning potential of the obligor.