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How child support works in high-income situations

On Behalf of | Jan 18, 2021 | Uncategorized |

Like other states, Pennsylvania has Child Support Guidelines in place.

Like the other courts in this state, the family law courts in the Harrisburg area are supposed these Guidelines when determining which parent should pay child support and how much support that parent should pay.

Many couples will find applying the Guidelines to be relatively straightforward, especially if they earn an ordinary income at a job. However, for couples who are high-earners, applying the Guidelines can be complicated and contentious.

Special rules apply to families who earn exceptionally high income

The Guidelines contemplate that parents may, between the two of them, earn up to $30,000 a month in net income.

While this is well above the income of an average American household, it is not only the very wealthiest who could be in this situation. For example, two surgeons who are married or spouses who co-own a prosperous business can easily net over $360,000 a year.

In these cases, the Guidelines call for judges to apply a calculation designed for high income cases.

However, at the point, a judge will have more leeway to deviate from that formula, so long as the judge awards at least the amount a spouse would receive under the Guidelines and for $30,000 a month.

High earners may have special income situations

Furthermore, many couples who earn a net income of more than $30,000 a month receive their income from a variety of sources.

While it may be simple enough to figure out a person’s basic salary, other job-related income like bonuses or certain fringe benefits may prove more complicated to figure out.

On a related point, a wealthy business owner may have high but irregular income which will have to be both accurately accounted for and averaged.

Moreover, certain returns on investments and other regular payments, including income from a trust or estate, are supposed to be included in the court’s child support calculation.