Wednesday, January 9, 2013

Texas Child Support Guidelines: What are My “Net Resources?”

Texas applies a percentage formula to the “monthly net resources” of one parent or conservator (called the “obligor”) to determine the amount of child support under statutory guidelines. The percentage changes based on the number of children involved, as will be discussed in a future topic in this blog.

To begin, what are your “monthly net resources?”

“Net resources” include the sum of all sources of income or assets from which income could be derived in a given year. So, “net resources” will include your wages, salary, overtime pay, tips, commissions, bonuses or any other compensation received for your personal services (regardless of whether you are self-employed).

It will also include any severance pay, retirement pay, pension income, social security benefits (other than supplemental security income), unemployment benefits, disability or workers’ compensation benefits, alimony, spousal maintenance, rental income from real or personal property, interest income, stock dividends, royalty income, capital gains, trust distributions, annuity income, gifts and prizes.

This list is not all-inclusive – if you received money, it will most likely be included in your “net resources” unless it falls within a specific exception recognized by the Texas Family Code. Those exceptions include: the return of capital or the return of principal owed to you on a note; accounts receivable; certain welfare benefits (such as food stamps or WIC benefits), foster-care payments, and your spouse’s income. 

From your “monthly net resources,” you may subtract a limited number of items: (a) social security taxes; (b) federal income taxes based on the tax rate for a single person claiming one personal exemption and the standard deduction; (c) state income taxes, if any; (d) union dues; (e) expenses for health insurance coverage for your child; and (f) cash medical support for your child.  You cannot subtract any deductions for contributions to an individual retirement account or 401(k) plan, insurance coverage for persons other than your child, employee stock purchases or similar items.