North Carolina General Statute 50-13.4 requires the Conference of Chief District Judges to create uniform guidelines for determining a parent’s child support obligations, and must review such guidelines periodically (at least every four years) to determine whether application of the guidelines leads to appropriate child support orders.
These guidelines are a product of the review process conducted by the Conference of Chief District Judges. Insight from outside agencies, attorneys, judges, and members of the public was solicited in a public hearing conducted by the conference.
These revised guidelines were effective January 1, 2011. North Carolina’s child support guidelines function as a rebuttable presumption in legal proceedings involving the child support obligation of a parent (including orders entered in: criminal and juvenile proceedings; UIFSA proceedings; civil domestic violence proceedings pursuant to G.S. Chapter 50B; and voluntary support agreements and consent orders approved by the court). The support guidelines are not applicable to child support orders against stepparents or other persons or agencies that are secondarily liable for child support. If parents have a valid, unincorporated separation agreement that determines child support requirements by a parent and an action for child support is then brought against the parent, the court will base the parent’s obligation on the amount of support provided under the separation agreement rather than the amount of support dictated by the child support guidelines unless the court determines, by taking into account the child’s needs and the factors listed in the first sentence of G.S. 50-13.4(c), that the amount of support under the separation agreement is not reasonable.
The court must use the guidelines when it enters a temporary or permanent child support order in a non-contested case or a contested hearing. The court may deviate from the guidelines if, after hearing evidence and considering the reasonable needs of the child for support and the ability of each parent to provide that support, it finds that applying the guidelines would not meet, or would exceed, the reasonable needs of the child, or would otherwise be unjust or inappropriate. If the court deviates from the support guidelines, it must make written findings:
- Stating the amount of the supporting parent’s presumptive support obligation determined by the guidelines;
- Examining the reasonable needs of the child and the relative ability of each parent to provide support;
- Supporting the court’s conclusion that the presumptive amount of child support determined under the guidelines is inadequate or excessive or that application of the guidelines is otherwise unjust or inappropriate; and
- Stating the factors used by the court to determine the amount of child support ordered. (For example, a court might deviate when one parent pays 100% of the child support obligation and 100% of insurance premiums.)
The intention of guidelines is to give sufficient awards of child support that are equitable to the child and both of the parents. When the court applies the guidelines, an order for child support in an amount determined pursuant to the guidelines is presumed to meet the reasonable needs of the child, taking into account the relative ability of each parent to provide support, and specific findings as to a child’s reasonable needs or the relative ability of the parents to provide support are thus not required.
Whether the court deviates from the guidelines or bases a child support order on the guidelines, the court should consider including the child support worksheet it uses to determine the supporting parent’s presumptive support obligation under the guidelines.
Retroactive Child Support
In situations involving a parent’s duty to support their child for a period before a child support action was filed (i.e., claims for “retroactive child support” or “prior maintenance”), the court may calculate the amount of the parent’s obligation (a) by determining the amount of support that would have been ordered had the guidelines been applied at the start of the time period for which support is being requested; or (b) based on the parent’s fair share of expenditures for care of the child. However, if the parents have a valid, unincorporated separation agreement that specified a parent’s child support obligation for the period of time before the action was filed, the court will not enter an order for retroactive child support or prior maintenance in an amount that differs from the amount specified by the unincorporated separation agreement.
Supporting Parents with Low Incomes
The guidelines include a self-support reserve that ensures that parties have sufficient income to hold a minimum standard of living based on the 2009 federal poverty level for one person ($902.50 per month). For those with an adjusted gross income of less than $999, the guidelines require creating a minimum support order ($50). For those with adjusted gross income above $999, the Schedule of Basic Support Obligations adds a further adjustment to maintain the party’s self-support reserve.
If the adjusted gross income falls within the shaded area of the Schedule and Worksheet A is used, the basic child support obligation and the total child support obligation are added using only the party’s income. In these cases, childcare and health insurance premiums are not be used to determine the child support obligation. However, payment of these costs or other extraordinary expenses may be a cause for deviation. This prevents disproportionate increases in the child support obligation with moderate increases in income and guards the integrity of the self-support reserve. In all other cases, the basic child support obligation is determined using the combined adjusted gross incomes of both parents.
Support in Cases Involving High Combined Income
In cases in which the parents’ combined adjusted gross income is more than $25,000 per month ($300,000 per year), the supporting parent’s basic child support obligation cannot be determined by using the child support schedule.
In cases in which the parents’ combined income is above $25,000 per month, the court sets support to meet the reasonable needs of the child for health, education, and maintenance, taking into account the earnings, conditions, estates, accustomed standard of living of the child and the parents, the child care and homemaker contributions of each parent, and other facts of the particular case, as provided in the first sentence of G.S. 50-13.4(c). The schedule of basic child support may be of use to the court in determining a minimal level of child support.
Assumptions and Expenses in Schedule of Basic Child Support
North Carolina’s child support guidelines are based on the income shares model. The income shares model is based on the idea that child support is a shared parental responsibility and that a child should receive the same proportion of parental income he or she would have received if the parents remained together. The schedule of basic child support obligations is mostly based on an analysis by the Center for Policy Research regarding family spending for children.
The child support schedule included in the guidelines is based on economic data that represent adjusted estimates of average household spending for children between birth and age 18, excluding child care, health insurance, and healthcare costs that exceed $250 per year. Expenses incurred for visitation are not included in the schedule.
The schedule assumes that the parent receiving child support claims tax exemptions for the child. If the parent who receives child support has minimal or no income tax liability, the court may require the custodial parent to assign the exemption to the supporting parent, and thus deviate from the guidelines.
The Schedule of Basic Child Support Obligations is based on net income, which is converted to gross annual income by adding in the federal tax rates, North Carolina tax rates and FICA. Gross income is income before deductions for federal or state income taxes, Social Security or Medicare taxes, health insurance premiums, retirement contributions, or other amounts withheld.
Gross income: “Income” is a parent’s actual total income from any source, including income from employment or self-employment; ownership or operation of a business, partnership, or corporation; rental of property; retirement or pensions; interest; trusts; capital gains; annuities; Social Security benefits; disability pay; workers compensation benefits, unemployment insurance benefits; and insurance benefits, gifts, prizes and alimony or maintenance received from someone other than the parties to the action.
When a person receives income on an irregular or one-time basis, the court may average or prorate the income over a period of time or require a parent to pay as child support a percentage of his or her non-recurring income that is equal to the percentage of the recurring income paid for child support.
Benefits that are specifically excluded include Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps and General Assistance.
Social Security benefits received for the benefit of a child as a result of the disability or retirement of either parent are included as income credited to the parent on whose earnings history the benefits are paid, but are deducted from that parent’s child support obligations.
Unless otherwise noted, income does not include the income of a person who is not a parent of a child for whom support is being ordered, regardless of whether that person is married to or lives with the child’s parent or has physical custody of the child.
Income from self-employment or operation of a business: Gross income from self-employment, royalties, rent, proprietorship of a business, or joint ownership of a partnership or closely held corporation, is defined as gross receipts minus ordinary and necessary business expenses required for self-employment or business operation. Ordinary and necessary business expenses do not include amounts allowable by the IRS for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses found by the court to be inappropriate for determining gross income.
Generally, income and expenses from self-employment or operation of a business should be reviewed to calculate an appropriate level of gross income a parent has to meet child support obligations. In many cases, this amount differs from a determination of business income for tax purposes. Expense reimbursements or in-kind payments (i.e. use of a company car or reimbursed meals) received by a parent in the course of employment, self-employment, or operation of a business count as income if they are significant and reduce personal expenses.
Potential or Imputed Income: If either parent is voluntarily unemployed or underemployed to the extent that the parent cannot provide a minimum level of support for himself and his children when he is physically and mentally capable of doing so, and the court finds that the parent’s voluntary unemployment or underemployment is the result of a parent’s deliberate suppression of income to avoid or minimize his child support obligation, child support may be calculated based on the potential, rather than actual, income. Potential income may not be imputed to a parent who is physically or mentally incapacitated or is caring for a child who is under the age of 3 and for whom child support is being determined.
The amount of potential income imputed to a parent is based on the parent’s employment potential and likely earnings level indicated by the parent’s recent work history, occupational qualifications and job opportunities and earning levels in the community. If the parent has no recent work history or vocational training, potential income should not be less than the minimum hourly wage for a 40-hour week.
Income Verification: Child support determinations under the guidelines are based on parents’ incomes at the time the order is entered. Income statements of the parents should be proven through documentation of current and past income. Suitable documentation of earnings (at least one full month) includes pay stubs, employer statements, or business receipts and expenses, if self-employed.
Documentation of current income should also include copies of the most recent tax return to verify earnings over a longer period of time. Sanctions could be imposed for failure to cooperate with this provision on the motion of a party or by the court on its own motion.
Pre-Existing Obligations and Responsibility for Other Children
Child support payment a parent makes under court order, separation agreement or voluntary support agreement are deducted from a parent’s gross income. The court may consider a voluntary support arrangement as a pre-existing child support obligation when the supporting parent has consistently paid child support for a reasonable and extended time.
A pre-existing support order is one that is in effect at the time a child support order is entered or modified, whether or not the child to receive support was born before or after the child for whom support is being determined. Alimony payments should not be considered a deduction from gross income but may be considered a factor to deviate from the final presumptive child support obligation.
A parent’s financial obligation to his natural or adopted children who currently live with the him (other than children for whom child support is pending) is deducted from his gross income. A deduction is appropriate when a support order is entered or modified, but may not be the sole basis for modifying an existing order. A parent’s financial obligations to his natural or adopted child currently living with the parent is: (1) equal to the basic child support obligation for these children based on the parent’s income if the other parent of these children does not live with the parent and children; (2) one-half of the basic child support obligation for these children based on the combined incomes of both parents of these children, if the other parent of these children lives with the parent and children.
Basic Support Obligation
The basic child support obligation is determined using the North Carolina Schedule of Basic Child Support Obligations. For combined monthly adjusted gross income falling between amounts shown in the schedule, the basic child support obligation should be provided. The number of children refers to children the parents share joint legal responsibility for and for whom support is being sought.
Child Care Costs
Reasonable childcare expenses that are, or will be, paid by a parent because of employment or a job search are added to the basic child support obligation and prorated between the parents based on income. When a parent’s monthly gross income falls below the amount indicated below, all childcare costs are added: 1 child – $1,100; 2 children – $1,500; 3 children – $1,700; 4 children – $1,900; 5 children – $2,100; 6 children – $2,300.
At the given income levels, a parent paying childcare costs will not benefit from childcare tax credits. In fact, when the income of the parent who pays childcare costs exceeds the amounts indicated above, only 75% of actual childcare costs are added.
The amount a parent pays, or will pay, for a child’s health insurance is added to the basic child support obligation and prorated between the parents based on their incomes. The payments that a parent’s employer makes for health insurance, which are not deducted from the parent’s wages, will not be included. When a child is covered by family policy, only the health insurance premium attributable to that child, will be added. If this amount is unverifiable or unavailable, the cost of the premium is divided by the total number of persons covered by the policy and then multiplied by the number of covered children for whom support is being determined.
A court may order uninsured medical or dental expenses that exceed $250 per year or other uninsured healthcare costs to be paid by the parents in proportion to their respective incomes. The court may also order either parent to obtain and maintain health insurance coverage for a child if it is currently available to the parent at a reasonable cost. Health insurance is considered reasonable in cost if it is employment-related or other group health insurance. If health insurance is not actually and currently available to a parent at a reasonable cost at the time the court orders child support, the court may order the parent to obtain and maintain health insurance for a child if and when the parent has access to reasonably-priced insurance for the child.
Extraordinary expenses that include (1) special, private elementary, or secondary school expenses necessary to a meet a child’s specific educational needs; and (2) transportation costs between the homes of a child’s parents may be added to the basic support obligation, and each parent may be ordered to pay their share according to their respective income if the court deems the expenses reasonable, necessary and in the best interest of the child.
Child Support Worksheets
Under the guidelines, presumptive obligations are determined using the child support worksheets. The worksheets must include the income of both parents, regardless of whether one is seeking support from the other, or a third party is seeking support from one or both parents. The worksheets cannot be used to calculate support obligation of a stepparent, or other person who is secondarily responsible for the support of a child. Income of a person who is not the parent of the child for whom support is being determined by the worksheets, should not be included.
Worksheet A should be used when: (1) one parent (or third party) has primary physical custody of all of the children for whom support is being determined; and/or (2) a parent (or third party) has primary physical custody of a child if the child lives with that parent (or custodian) for at least 242 nights during the year. Primary physical custody is determined without regard to whether a parent has primary, shared, or join legal custody of a child.
Worksheet A should not be used when: (1) a parent has primary custody of one or more children and the parents share custody of one or more children [instead, use Worksheet B] or (2) when primary custody of two or more children is split between the parents [instead, use Worksheet C]. In a support case that involves primary physical custody of a child, an obligation is calculated for the parents, but a court order is entered requiring the parent without primary physical custody of the child.
You should use Worksheet B when: (1) the parents share custody of all of the children for whom support is being determined; or (2) when one parent has primary physical custody of one or more of the children and the parents share custody of another child. Parents share custody is a child lives with each parent for at least 123 nights during the year, and each assumed financial responsibility for the expenses of the child during time he or she lives with that parent. A parent does not have shared custody if the child spends less than 124 nights per year with the parent, and the other parent has primary physical custody of the child.
Shared custody is determined absent determinations of primary, shared or joint legal custody of a child. In share custody cases, the combined income of the parents is increased by 50% and distributed between the parents based on each parent’s income and the amount of time the children live with the other parent.
The adjustment based on the amount of time the children live with the other parent is calculated for all of the children regardless of whether a parent has primary, shared, or split custody of a child. After support obligations are determined for both parents, the parent with the higher obligation must pay the difference between their own presumptive obligation and the other parent’s presumptive obligation.
Use Worksheet C when primary physical custody of two or more children is split between the parents. Split custody refers to cases in which one parent has primary custody of at least one of the children for whom support is being determined and the other parent has primary custody of the other child or children.
Do not use Worksheet C when the parents share custody of one or more of the children and have primary physical custody or split custody of another child [instead, use Worksheet B], and/or the parents’ combined basic support obligation is split between the parents based on their respective incomes and the number of children living with each parent.
After child support obligations are calculated for both parents, the parent with the higher child support obligation is ordered to pay the difference between the presumptive child support obligation and the other parent’s presumptive child support obligation. Such a determination does not apply the self-sufficiency reserve incorporated in the shaded area of the schedule when using Worksheet C.
Modifying an order that is more than three years old requires a 15% or more difference between the amount of the existing order and the amount of child support resulting from application of the guidelines based on the parents’ current incomes and circumstances will be presumed a substantial change of circumstances warranting modification. This presumption will not apply to orders less than three years old.