I am currently under court order to pay spousal and child support. Is this amount based on gross or net income? If my tax withholding changes, does the support amount change?
Family Law Attorney
Support orders are based on gross income; the calculation takes your tax status into account. If you're now under an order to pay SPOUSAL support, you may wish to CHANGE your withholding, because spousal support is (usually) tax-deductible to the paying spouse, so your taxes should go DOWN. Consult a CPA.
Divorce / Separation Lawyer
You have asked a question that someone should write a book about. Without question, your support obligations are calculated with your gross income but based upon your net income. The Court allows legal deductions, but disallows voluntary deductions. You have a lot of control about how much is withheld from your taxes, so whatever is withheld is not the issue; the issue is how much you actually have to pay at the end of the year. Your ex obtains a deduction on the spousal support paid, just as the spousal support received by you is imputed on your tax return as income; however, he does not obtain a deduction for child support, nor do you claim the same as income.
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If you are asking about temporary spousal support and guideline child support, then it is based upon your gross earnings, less your allowable deductions.
Allowable deductions under the Family Code include taxes based upon your tax bracket, plus some other expenses. The tax bracket is affected by the spousal support deduction, plus mortgage interest deductions, property taxes, etc. The guideline calculating software figures all of that out.
The software also recommends what a good withholding level would be for the support obligor, so as to maximize their take-home pay after taxes and support payments.
So no, your withholding allowance doesn't affect the support; but the support can suggest your withholding allowance.
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