Child Support and Self-Employed Parents
Experienced and Certified Legal Advocates in Raleigh
Vitale Family Law has 25 years of professional experience helping clients with family legal issues in Raleigh, especially with cases as complex as child support and self-employed parents. North Carolina has specific guidelines in place addressing how self-employed individuals should calculate their gross income for the purposes of child support, and an experienced attorney can better help you gather the appropriate financial documents to do this. Our family law-certified legal team will take a personalized approach to your case and strategize a unique angle for you as a self-employed parent, whether you seek child support or are being ordered to pay child support.
Self-Employment Income Guidelines
According to North Carolina’s Child Support Guidelines, the amount of child support a court may order will depend primarily on each parent’s gross income, which includes income from employment (salaries, wages, commissions, bonuses, dividends, severance pay, etc.), ownership or operation of a business, retirement or pensions, Social Security and VA benefits, workers’ compensation and unemployment benefits, and any alimony or maintenance received. These guidelines specifically address gross income from self-employment, as well.
According to the state’s child support guidelines, a parent’s income from self-employment or operation of a business will be taken into consideration when determining child support. Gross income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation. Expense reimbursements or in-kind payments (e.g., use of a company car, free housing, reimbursed meals) received by a parent in the course of employment, self-employment, or operation of a business are also counted as income if they are significant and reduce personal living expenses. Note that ordinary and necessary business expenses do not include amounts allowable by the Internal Revenue Service (IRS) for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined to be inappropriate for evaluating gross income.
Child support calculations under the guidelines are based on the parents' current incomes at the time the order is entered, so their income statements should be verified through documentation of both current and past income. Suitable documentation of current earnings includes pay stubs, employer statements, or, for self-employed individuals, business receipts and expenses. Be aware that documentation of current income must be supplemented with copies of the most recent tax return to provide verification of earnings over a longer period, and sanctions may be imposed for failure to comply.
Self-Employed Persons and High-Income Earners
If you or your spouse/other parent are self-employed or a high-income earner involved in a child support or alimony lawsuit, it is in your best interests to consult an experienced attorney for legal guidance throughout your case. Even the smallest details in your income calculation can affect the amount of child support you seek to request or are being ordered to pay.
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