Child Support in Illinois—Multiple Answers to a Single Question
Why are my support calculation results different from my opposing counsel’s?
I hear this question all the time, both in my work with Family Law Software and in my practice. Now that Illinois uses the income shares method, we have all been faced with situations where each side comes up with a different amount of guideline child support based on what seem to be the same facts.
The explanation of the differences almost always lies in the tax consequences of choices made in the data entry.
In Illinois we base child support on net income. Since federal taxes are a deduction in arriving at net income, the calculation always requires taking tax consequences into account.
There are two tax-related choices which are often misunderstood and used incorrectly:
- The dependent exemption
- Designation of majority-time parent
This article will discuss each of these choices.
Allocation of the Dependent Tax Exemption
If there is no agreement or court order, the parent with a majority of parenting time would be entitled to the allocation of the dependent tax exemption.
However, this is a tax benefit which the parties can allocate by agreement. Currently (at least until the end of 2025) the value of the tax dependent exemption is ZERO.
Under the Tax Cut and Jobs Act of 2017 (TCJA) the standard deduction was substantially increased, and many previously existing personal deductions were eliminated by reducing them during the life of the TCJA provisions (which by their terms expire at the end of 2025).
But while the dependent tax exemption was reduced to zero, the dependent tax exemption still controls the award of the Child Tax Credit and Additional Child Tax Credit (CTC). (If the minority-time parent is claiming the exemption, the majority-time parent must complete Form 8332 and give it to the minority-time parent, who files it with the minority-time parent’s tax return.)
Designation of Majority-Time Parent
The second set of tax consequences is more complex and nuanced. The designation of a Majority Time Parent is a status based on facts of actual overnights and cannot simply be allocated by agreement. There are several tax benefits available to the Majority Time Parent separate and distinct from the CTC. These tax benefits primarily include the availability of Head of Household filing status (HOH) and the Earned Income Tax Credit (EITC).
Both credits are phased out at higher earnings levels. So, the designation of Majority Time Parent is more important for lower- and middle-income levels.
When the majority of parenting time in a family is clearly allocated between the parents, the designation of a Majority Time Parent is not in question. But when the parenting time is purportedly 50/50, who is designated Majority Time Parent? And why is there such a big difference in the support calculation from this one tiny selection?
Let’s start by acknowledging that in real life there is no true 50/50 parenting time. Add to that the fact that, in most years, there is an odd number of overnights (365). Since it is unlikely the parents are rousing their child/ren in the middle of the night to change homes, one parent will have at least one additional overnight each year.
The IRS deals with the situation of ‘equal parenting time’ with a tie-breaker rule that designates the higher earning parent as the Majority Time Parent when parenting time is established at 50/50.
This puts the IRS in position to potentially receive more tax revenue, as the higher earning parent is more likely to be phased out of these tax benefits. Conversely, it provides worse monetary results for the family.
The designation of Majority Time parent affects the standardized net income calculation, as the official Gross-to-Net Income Table has two results for net income: the columns for Majority Time Parent and the Non-Majority Time parent. Therefore, it matters which parent is which. If you are doing actual tax calculations, and not using the Gross-to-Net Income table, then only the Majority Time Parent can utilize the tax-advantaged Head of Household filing status and claim the generous Earned Income Tax Credit.
Some professionals have tried to ameliorate this problem and the discrepancy in calculation results with the change of Majority Time Parent in families with more than one child by designating each parent as Majority Time Parent for at least one of the children.
Unfortunately, this will give different results than seen with a 50/50 designation, because this is considered Spilt Physical Care in our statute, and the support amount is currently calculated for each household separately, using the number of children in each household and then offset. The results from netting two 1-child sole-custody calculations are different than the results from a 2-child shared-custody calculation.
Now, depending on the choices being made for Majority Time Parent, the professional can be looking at three or more different results. In an “equal” parenting time situation, which one is correct? Truly, in Illinois there may be more than one mathematically correct result depending on how the many variables that go into our child support calculation are entered.
The bottom line is that, in a 50-50 parenting situation, there will be a human element in arriving at the child support result. There is no straight calculation that will do it.
In Family Law Software we have a page that allows for side-by-side comparison of the computation options. The remainder of this article explains how this works, so you can arrive at a reasonable and fair child support amount in the case of 50-50 parenting.
Let’s start by understanding that, in Family Law Software, there are two separate and distinct checkboxes: one for Majority Time Parent and the other for Dependent Exemption. As explained above, these are both important choices. They do not have to both go to the same parent.
Next, go to our What If page for child support side-by-side options, found in the Analysis Section on the page called Support What If (Basic users of FLS will not have access to this function).
On this page, you can explore all the different permutations of Majority Time Parent, Dependent Exemption allocation, number of overnights, and filing status and see the resulting support amounts calculated for each scenario.
Often, choices that change net income will also change guideline maintenance as well. The key for the knowledgeable attorney is to not only look at the support and maintenance numbers themselves, but also look at the Support Impact report for each scenario to see the resulting impact on the financial situation for the entire family.
To accomplish this, swap each scenario in turn for the Actual column, and then flip to the Support Impact report and print (PDF or Print) each one to be able to compare them.
Looking at the child support results that you get in all possible scenarios may help to suggest some kind of average value among all of them, or clarify which option is best for that family.
Future blogs/articles will address other tax choices which impact child support calculations in Illinois. Stay tuned.
Nancy Chausow Shafer is the Co Managing Partner at Sage Counsel, LLC. Nancy is a Family Law Software guru. Family Law Software is the nationwide leading divorce financial software. Nancy is FLS’ exclusive sales representative for Illinois, California, and Minnesota. Sheis also an author and frequent speaker on family law, collaborative practice, mediation, and child support guidelines.