Skip to main content

Self-Employment Income & Child Support: Massachusetts vs. the National View

We are pleased to link to an Article published by a colleague of ours, Jason V. Owens, Esq. of Stevenson & Lynch, P.C., in the June 2011 edition of the Suffolk Journal of Trial & Appellate Advocacy entitled Determining Self-Employment Income for Child Support Purposes: the Massachusetts View Compared with the National View. The article focuses on the thorny problem of calculating “income” for child support purposes in cases involving self-employed parents who operate a business over which the parent exerts financial control.

Much of the article explores the differences and similarities between “business income”, as defined by federal tax law, and “self-employment income”, as defined by child support guidelines in Massachusetts and other states. Much of the impetus behind this “compare and contrast” approach is practical. Determining a business owner’s “income” for child support purposes almost always begins with an examination of the business’s state and federal tax returns. The challenge for attorneys, parties, and judges often lies in determining which sections of the business’s tax returns can be applied to the child support analysis – and which sections must be carefully scrutinized or rejected altogether when analyzing the return from the child support perspective.

How does “business income” on a tax return differ from “self-employment income” on a financial statement filed in a child support case? Which tax deductible business expenses are most likely to be abused and manipulated by a self-employed parent? When can a business expense be legitimately deductible under the tax code but countable as “income” under child support law? The Article explores the legal underpinnings of these and related questions, identifies and pinpoints the prevailing law and national trends, and acknowledges the ambiguities and approaches taken among the states.

Reprinted with permission from Stevenson & Lynch, P.C.

Comments

Popular posts from this blog

2024 U.S. Presidential Party Platforms - What are the policy positions that could affect families?

While the laws that affect family formation, marriage and divorce are often made at the state level, there are also many policies and laws at the federal level that affect families and children.  Just some examples from recent years that have impacted families in my mediation practice include changes to the federal tax laws (such as  the elimination of the alimony tax deduction ) and U.S. Supreme Court rulings on same sex marriage and reproductive health rights.  In just over a month, the United States presidential election will have a significant impact on these federal policies going forward, and could choose the next appointments to the U.S. Supreme Court as well. In 2016 and 2020 we shared what each presidential platform said about families and policy regarding family formation and dissolution, and below we'll provide you an update on the 2024 presidential platforms.  As Maya Angelou said, "When someone shows you who they are, believe them the first time."...

Updating your Divorce Agreement Template - More Lessons from Cavanagh v. Cavanagh

We recently posted a lengthy review of the the Massachusetts SJC decision in Cavanagh v. Cavanagh (2002)  which included some recommendations for drafting divorce agreements, also typically called Separation Agreements.  The Cavanagh case is best known for it's clarification of how the courts should evaluate support calculations when a case may have both alimony and child support.  However, the case also contained numerous rulings that should make practitioners review their Separation Agreement templates and change some of the ways in which they may have previously drafted certain sections. In this post we'll share actual language from the Gray Jay Endeavors, LLC form Separation Agreement template which addresses each of the issues raised by the Cavanagh decision.  If you are a professional interested in purchasing the full Separation Agreement template, check out Gray Jay's  forms subscription which includes editable Massachusetts court forms and financial st...

Co-Parenting Coordinator Agreements - What They Can Do and How to Draft Them

Photo by Marcelo Silva on Unsplash Conflict between parents negatively affects children but for some parents it's hard to avoid conflict when separating or divorcing.  Loss, grief, and anger all make it difficult to co-parent and some parents need help overcoming those barriers. One of the professionals that can help parents reduce conflict by assisting them in making the necessary co-parenting decisions is a Co-Parenting Coordinator.  The duties of a Co-Parenting Coordinator can vary but often include assisting parents with decision making around: changes or clarifications of the existing parenting plan; exchanges of the child or children including date, time, place, means of and responsibilities for transportation; education or daycare including school choice, tutoring, summer school, before and after school care, participation in special education testing and programs, or other educational decisions; enrichment and extracurricular activities including camps and jobs; the c...