How To Calculate Rental Income for Child Support

How To Calculate Rental Income for Child Support

When undergoing a divorce, child support is one of the most important considerations you should discuss with your ex-spouse.

Who should be responsible for the costs of raising your children is an issue that can be contentious, but it’s vital to ensure that both parties agree on a reasonable amount.

Child support is not only a parental obligation but also legal responsibility for both parents. Failure to sustain child support or provide a reasonable amount could lead to serious legal implications.

If you own a rental property, you may be asked to include the amount you earn as part of your total income when determining child support. However, figuring out the exact amount can be tricky.

Here’s what you need to know about calculating rental income for child support.

How Do Judges Decide the Amount of Child Support?

Different states have varying regulations about child support, and they could use different formulas to calculate the amount of child support. In most cases, here are the most considered factors:

  • How much income are both parents earning? (In some states, they only ask for a non-custodial parent’s income.)
  • Which parent spent more time with the child?
  • What are the necessary costs for raising a child?
  • Are they supporting children from a previous marriage?
  • Which parent provided more monetary support during the marriage?

These are just a few factors that judges consider when calculating child support.

What Counts as Income?

Income is one of the most significant factors when calculating child support. In most state laws, parents are required to declare side incomes (i.e., rental income, stock dividends, or cash tips) as part of their overall income.

Rental Income

Rental income refers to the money made from a rental property. It includes any payments the rental owner receives, whether it be rent, fees collected for pet deposits, parking spaces, etc.

The inherent problem with this type of income is that it is inconsistent. If a parent has fluctuating income, it can be difficult to calculate their overall income accurately. One way divorcees resolve this is by using percentages instead of fixed amounts.

What Can You Deduct From the Rental Income?

When determining how much of your rental income you should consider when calculating child support, there are some costs that you can exclude. These include:

  • Mortgage payments
  • Property taxes 
  • Insurance premiums 
  • Maintenance fees 
  • Utilities

These excluded costs should be deducted from the total rental income before accounting for tax and other fees. This will give you and the judge a more realistic picture of how much you can contribute to child support.

However, the problem is if your loss exceeds the total rental income. In some states, you can claim a loss and remove the rental income as part of the child support. It is crucial to understand how your local regulations recognize rental income when calculating child support.

At What Age Should Child Support Stop?

When child support should end varies per circumstance. In most states, if a child reaches 18 years old, the non-custodial parent can stop paying for child support.

However, in some states, the responsible parent must continue paying for child support until their child turns 21. You must know how your state law determines when child support ends.

What Are the Legal Consequences of Not Providing Child Support?

Child support is a legal responsibility of the separated parents. If you fail to provide the amount of child support determined by the court, there could be severe legal implications. Depending on your state laws, you may face jail time or heavy fines for not providing child support.

According to 18 U.S.C. § 228, a parent who willfully neglects to pay child support can face the following consequences:

  • Federal prosecution
  • A misdemeanor criminal offense record
  • A maximum of six months of imprisonment
  • $5,000 penalty fine or higher

Your criminal charges could escalate if you’re behind your child support payment for more than two years or if you have a debt of $10,000 or more in child support.

In Conclusion

It’s essential to understand how your state law defines child support, including when it should end and the legal implications of failing to provide it. By learning more about rental income and child support laws, you can better understand your financial obligations to your child.

Calculating child support is a complex process, and hiring an experienced divorce lawyer is the best way to ensure that your child support agreement is in keeping with state law and fair for both parties.