How is Child Support Determined and Paid in Minnesota?
When is Child Support Ordered?Child support is ordered whenever a married couple with minor children divorce or obtain a decree of legal separation. If a married couple with minor children lives separate and apart, a parent or the public authority may seek a support order. If a child is born to parents who are not married to each other, paternity (parentage) must be established before a support order will be issued. Finally if a child is in the physical custody of an entity or individual other than the parent, either by consent or court order, a support order can be entered in favor of the entity or custodian.
"Child support" includes several different costs related to the expenses of children -- a monetary amount for the care and support of the child -- called basic support; "medical" support for insurance and prescriptions; work or education related "child care" costs; and support arrearages or payments to a public authority made on behalf of a child.
How is Minnesota Child Support Determined?Under the combined parental income for child support calculation (PICS), both the custodial and non-custodial parent's gross incomes are used -- with an adjustment for parenting time applied, as discussed below. Basic support is calculated using the combined gross incomes and a determination of each parent's proportionate share of the combined income. The parent with the greater income will generally pay basic support to the other parent except if the parents share 50/50 physical custody and their expenses for their children are equal. The calculation of the amount is a function of the combined incomes (PICS), the number of children supported, and the amount provided in the guideline child support chart in the statutes. This amount is the presumptive amount of support the parents should pay and is allocated between the parents based on their proportionate share of the PICS. The gross income of a parent includes all regular and periodic sources of income including gift income.
Is there any Adjustment to Child Support?Non-custodial parents will receive an adjustment to their child support amount depending on the amount of time they are granted for parenting time. Child support is based on the amount of parenting time granted in the divorce decree or custody order -- and is not based on the actual amount of parenting time the non-custodial parent exercises.
If the non-custodial parent is granted less than 10% of time, no adjustment to basic support is made. A reduction of 12% in the child support amount is granted if the non-custodial parent is granted parenting time between 10 percent and 45 percent of the time. If the parents generally share physical custody (at least 46% of time granted to each parent), an additional adjustment is made.
The Court may decide to order an amount other than "basic support" if certain "deviation factors" are present.
How is Gross Income Calculated for Self-Employed Persons?Income for self-employed persons or from the operation of a business means the gross revenues derived from employment or the business, less "ordinary and necessary expenses." Ordinary and necessary expenses generally must relate to the operation of the business and will not include accelerated depreciation expenses or investment tax credits, or expenses that are found to be inappropriate or excessive. Any self-employed person 0r a person who works as an independent contractor has the burden in court to prove that expenses they seek to deduct from their gross revenues are a legitimate business expense. After deducting all proper expenses from gross receipts, the remaining amount will be considered "actual" income. Under certain circumstances, a self-employed individual may also face the imputation of potential income unless they can show they are fully employed and not "underemployed" or working less than full-time in their vocation.
Is Child Support Paid When Both Parents Share Joint Physical Custody?If parenting time and parental incomes are equal, no basic child support will generally be payable unless the expenses of the child(ren) are not shared equally by the parents. Even if parenting time is equal, if the parental incomes are different, the parent with the higher income will usually pay basic child support to the other parent to balance the household resources of both homes. The guideline formula is adjusted for the equal parenting time and the final award will consider the differences in each parent's income.
Medical Support and Child Care Expenses AllocationExpenses incurred by a parent (either custodial or non-custodial) for health insurance -- medical support and child care (day-care) expenses are allocated under a support order.
Medical support will include an order providing for the continuation of health insurance for the minor children, making a cash contribution to the parent who maintains coverage to reimburse the parent for the cost of coverage, and allocating the un-reimbursed or uncovered expenses between the parents.
Work or education related child-care expenses are allocated between the parents in proportion to the parent's combined parental income for child support and the costs of care are adjusted based on the estimated federal and state child care credits available.