How is child support calculated in Texas?
Many divorcing couples with children often wonder how much they will have to pay in child support. In Texas, child support is calculated based on a specific formula.
Child support is among the countless issues that couples need to resolve if they decide to divorce. But how is child support calculated? Each jurisdiction differs and carries its own rules when it comes to determining how much a party will owe in monthly child support.
In the state of Texas, the courts use a specific formula. The formula to determine child support is based on a percentage of an individual’s net income.
The Texas child support calculation
First, the court must determine a party’s gross income. Gross income is “all income from whatever source” before deductions or taxes and includes cash, wages, bonuses, dividends, rents, pensions, and other types of income. The fair market value of goods or services received as payment also constitutes gross income. (Adjusted gross income, in contrast, is income after exemptions and deductions.)
After a person’s gross income is calculated, the court subtracts certain expenses to yield net income. Such expenses include:
- Total yearly Social Security taxes paid
- Total yearly federal income taxes paid (based on the tax rate of a single filer with one personal exemption)
- Total yearly state income tax
- Yearly health insurance premiums and medical expenses
- Yearly retirement contributions (mandatory)
Once these deductions are applied and net income is deduced, that net income is then multiplied by a certain percentage as stipulated in the Texas Family Code. The percentage will vary depending on how many children are involved. The rates are as follow:
- 20 percent for one child
- 25 percent for two children
- 30 percent for three children
- 35 percent for four children
- 40 percent for five or more children
For example, if a party is obligated to pay support for one child and that party’s monthly net resources is 2,000, then that party will be required to pay $400 a month in child support.
These percentages, however, are reduced if the obligor is obligated to pay child support to other children outside the marriage or from a different relationship.
It’s important to note that every situation is unique, and the formula is a general guideline. Different calculations will be needed for those who, for instance, are self-employed, disabled, or called to active duty, among other circumstances.
Further, generally, the state of Texas will only calculate child support based on a maximum net income of $8500. This means that any net income derived over this amount generally will not be used when calculating child support.
Parties are encouraged to consult with a Texas family law attorney to obtain an estimate of their predicted monthly child support obligations based on individual circumstances.
Keywords: child support, formula, net income