Time of Possession Adjustments
Interesting calls about the child support computation just never stop. First,
there was an issue about how to adjust child support in shared parenting orders
based on the time of possession. If you're thinking of looking for guidance from
the statute on this, you're not going to find it. Phase 1
Back in 1994, we took the percentage of time of possession and reduced the
obligor's annual obligation by that much. It seems logical, doesn't it? It's
just what the statute says, right? Anything wrong with this picture? Phase 2
Believe it or not, it was several years before a judge or magistrate posed
the following hypothetical: Consider the situation where a husband and wife
with equal income and equal adjustments enter a shared parenting plan calling
for 50% time sharing. The obvious response is that there should be no child
support. The logic and rationality is irrefutable—why would the law call for a
transfer of income that would upset the balance of the two households? How could
that be in the best interests of the child? As soon as you put the
hypothetical into the Phase 1 mechanics, you see a problem. The problem is you
can never calculate a zero support order by applying the percentage of time of
possession against the obligor's annual obligation. If you take the percentage
of time of possession (50%) and apply it against line 23, "ACTUAL ANNUAL
OBLIGATION," you'll reduce the obligor's annual obligation by 50%. If both
earned $35,000 annually with no other considerations such as adjustments or
child care expenses, the difference between a wash and 50% of line 23 would be
$2,233 (half of $4,467). Question: So, how can you get a zero support amount?
Answer: By applying the percentage time of possession against line 17 (Basic
combined child support obligation). Sometime after this situation was called to
our attention, we adjusted the time of possession calculation accordingly. To
clarify, you could always enter any adjustment you want on line 24b (Deviation
from shared parenting order), but if you click the button labeled "ORC
3119.24(B)(1) Amount of Time Spent With Obligor—Enter percentage of time,"
you'll get the Phase 2 calculation. Child Care Expenses
Enough about time of percentage adjustments. The child care expense
adjustment also has interesting issues. One area of statutory vagueness is the
child care computation being limited by a parent's income tax liability. Again
back in 1994, we realized there could be a difference of opinion about how the
federal child care credit could be handled, so we made the line 19 field
overrideable. If you asked it to, however, our child support program (WROCSG)
would use the parent's adjusted gross income (as per the income section of the
worksheet) and apply it to the federal child care credit's table of percentages.
The resulting figure would be subtracted from the parent's child care expenses
as the federal credit. The problem with this methodology is that a single
parent filing as head of household with one child and an AGI of $23,000 doesn't
pay any taxes. This is due to a combination of factors such as the head of
household reduced tax rate schedule, the standard deduction and the child tax
credit ($1,000 in 2003). The no-tax-AGI figure rises to about $33,000 when a
couple has two children. That's why it's important to have the newest version
of the child support program. It has the ability to treat this issue in any of
three ways: (1) you can simply ignore it if you know, for example, that it does
not apply; (2) if you have the last several years of tax returns and you know
the tax liability is always about the same, you can enter that amount and
WROCSG will use that amount as a limit on the calculation of the child
care credit; or (3) if you own the Ohio Spousal Support Calculator program, you can
have the child support program get the tax liability from the Ohio Spousal
Support Calculator
program and use the precise amount. What About Ohio?
That's not the end of the child care expense matter. Another question is
whether one should subtract the Ohio child care credit for a parent's expenses
in addition to the federal credit. The statutory caption for line 18 of the
child support worksheet is: "Annual child care expenses for children who are
the subject of this order that are work-, employment training-, or
education-related, as approved by the court or agency (deduct tax credit from
annual cost, whether or not claimed)" Right off the bat you might assume you
should figure in the Ohio credit. It says subtract the tax credit; it doesn't
say deduct only the federal tax credit. Again though, what seems simple may not
be so. It's been said that when the child support guidelines were enacted, there
was only a federal child care credit. Therefore, how could the legislators have
contemplated including the Ohio credit when it was not in existence at that
time? That's a persuasive argument. Our research disclosed that the child care
credit found its way onto the Ohio income tax return in 1988. The child support
guidelines were state-designed via federal mandate to be effective October 1,
1987. So it's true that the guidelines came first. That argument is also
supported by the fact that the statute uses the words "tax credit" and not "tax
credits."
Construction is certainly not clarified by the language of line 8:
"adjustment for minor children …(number of children times federal income tax
exemption less child support received, ….)." Here we have a situation where,
when the federal exemption was contemplated, it was stated explicitly. It's
interesting to note in this context that only the federal exemption amount is
subtracted, NOT the Ohio. Is it relevant that in line 11, where the subject is
income taxes paid, the question specifically refers to "local" income tax?
Another question we've entertained regarding the child credit—what does the
phrase "whether or not claimed" on line 19 mean exactly? The construction
we've heard advanced by persons intimately familiar with the legislative history
is that some parents pay friends or relatives to baby sit and they don't file
for the federal credit because they don't want to cause a reported income
situation for the sitter. The result is that the obligor gets the effective
support deduction even in instances where the obligee doesn't take the
deduction. So what's the rationale? The effect is to doubly penalize the obligee—
in the first instance they must abstain from taking the federal credit, and then
be compelled to declare a credit they didn't take as a reduction of child
support order. We've also heard it maintained that "whether they take it or
not" means that the credit should be calculated even if the taxpayer doesn't
take it because their tax liability is zero. While this argument ignores the
fact that the tax liability is part of the credit calculation itself, it is
possible that the legislature wanted to avoid making the support calculation
tax-dependent and transforming family law courts into glorified tax preparers.
The solution? Calculate the credit based on a parent's line 7 income and the
child care credit tables. Thus, the entire calculation is simplified: line 7
times the corresponding table percentage. One wonders if the legislature meant
for support worksheet preparers to achieve such a high degree of tax preparation
accuracy, would they be so vague on line 18 as to leave it open-ended about
whether to include the Ohio child care credit? In the final analysis, the
closer one examines them, the more one discerns a subtle lack of precision in
the child support guidelines. Courts are constitutionally charged with the duty
to construe laws, but software companies aren't and shouldn't. While
implementing some default actions, we always attempt to be sensitive to those
parts of the calculation that are subject to opposing views and to design
WROCSG to permit users to modify or override default actions when a user
feels it is right or reasonable to do so. |
