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Virginia Child Support Issues

(1) Child support "guidelines."

Resolution of appropriate child support amounts has become greatly simplified in recent years, with the enactment of "minimum child support guidelines" in most States (including Virginia and D.C.) -- based primarily on the spouses' respective incomes (and the number of minor children to be supported)(23). Now the Judges have to follow the guidelines -- or express sufficient reasons for refusing to do so. Although the guidelines, themselves, are subject to interpretation -- the bottom line is that, usually, well-counseled spouses will agree to child support amounts which approximate what is dictated by the guidelines. And, now even more than used to be the case, if a significantly lower amount is agreed to, even in writing, the payor spouse's apparent "bargain" will, at least until the Agreement is incorporated in a Court Order, always be subject to being wiped out, if the custodial parent should seek to have child support increased by a Court.(24)

(2) Personal income tax exemptions relating to the children.

Another important caveat for consideration regarding child support amounts inheres in the issue of the personal income tax exemptions relating to the children. With the value of each personal exemption now a $2,800.00 deduction (and being "indexed" upward each year hereafter), this is an increasingly valuable point of possible negotiation. I.e., at the top brackets, the cash tax value of a $2,800.00 income tax deduction is worth about 35% of that amount for Virginia residents who "itemize" deductions (and even more for D.C. residents); i.e., $980.00 per year -- or the equivalent of $81.67 per month (per child) (26)

At the 20% Federal and State tax bracket level, however, the value of each deduction is worth only $560.00 per year -- or $46.67 per month, per child (and, at lower brackets/levels, obviously, even less).

In addition, the up-to-$500.00 per child (from and after tax year 1998) annual tax credit enacted in the "Taxpayer Relief Act of 1997" intensified the financial impact of being able to claim the personal tax exemptions relating to the children, at least for middle and lower income taxpayers (i.e., the credit is phased out at the rate of $50.00 for each $1,000.00 of "modified adjusted gross income" below the "threshold" amounts; $110,000 for joint returns, $75,000 for single individuals and heads-of-household, and $55,000 for married taxpayers filing separate returns). It probably should be noted that child care credits are not dependent on being able to claim the personal exemption related to the child.

Under present Federal tax law, unless the child(ren) has (have) been living primarily with the custodial parent less than the last six months of the year, unless there is a written agreement to the contrary, the custodial parent is entitled to "claim" the child(ren) -- regardless of how much child support is paid by the other parent. A new Virginia provision, effective July 1, 1998, purports to give our Courts authority in effect to allocate personal tax exemptions regarding the children (i.e., over the objection of the parent who otherwise might have been able thus to claim the children). It would seem that a substantial challenge might be asserted, concerning the constitutionality of this provision (i.e., as violative of the Federal Supremacy Clause). For now, however, effective July 1, 1998, this seems to be the law of our State!

Accordingly, where there is now (and probably will continue to be) a significant difference between the incomes of each spouse, it may be in the interests of both spouses for it to be agreed for a somewhat higher amount of child support to be paid, in exchange for allowing the payor parent to claim the child(ren). In the above-described situation, for example, an extra $50.00-75.00 per month per child would net the custodial parent more money, but cost the payor parent less to provide (i.e., other than what he or she otherwise would be paying in child support, plus income taxes).

However, with the possible loss of personal exemptions at the higher brackets, the best approach might well be a potential additional "stipend" (in addition to monthly child support), to be paid by the noncustodial spouse at the end of each calendar year; with the potential additional amount to be "Indexed," in accordance with future increases in the personal exemption allowances; and the amount to be set, initially, so as to benefit both spouses (e.g., at about the mid-point between the present cash tax benefit of the personal exemption to/for each spouse); but with the non-custodial spouse to have a pay-it-or-lose-it option to choose as of each December 31.

Even if these ideas merely confuse you at this juncture, though, at least, perhaps, you will understand the potential importance of careful consideration of this matter with competent counsel . . .

(3) Provision for college expense.

Finally, with respect to child support, a few comments on the time period during which it will be payable, and the issue of provision for college expenses -- should be helpful.

Under present Virginia law, unless a Court incorporates an Agreement which provides otherwise, our Virginia Courts do not have authority to compel child support payments beyond the age of the child's majority; or if, on turning 18, he or she is still a full-time high school student living primarily with the custodial parent, until he or she graduates from high school or turns 19, whichever comes first (unless he or she is then physically incapable of self-support, due to handicap). Provision for payment of a portion or the entirety of college expenses, thus, usually, can and should be considered a negotiable "extra."

On the other hand, where children are very young at the time of separation, it may not be wise for parents to bind themselves to unalterable commitments years in the future (which even the children could sue to enforce as "third party beneficiaries"), when their individual or respective financial circumstances may be significantly different than at present or in the foreseeable future (but, if the commitment is not sufficiently clearly expressed, or too flexibly stated, it may not be susceptible of enforcement by the Courts).(27) Furthermore, one way to test the commitment of a custodial parent demanding inclusion of such an item is to demand the other parent, also, be bound in the Agreement for at least a stated portion of the expense.

However, where the child(ren) do(es) seem to be "college material," and the parent with the significantly greater income believes that, when the time comes, he or she will be hit with "the bill" and/or the resulting "guilt trip," from the standpoint of that parent, it might well be wise to "negotiate" inclusion of such provisions at the time of separation -- especially if, where there still will be younger minor children to support, provision of such assistance for the older child(ren) is contractually conditioned on the child support amounts for the younger children being set with such college expense amounts in mind, and/or reduced by those amounts; and, where alimony is also provided, those amounts also being lowered appropriately.

23. In D.C., the custodial parent's income is only partially considered, which usually results in much higher child support awards than in Virginia. Most states, though, follow the strict "incomes shares" approach adopted in Virginia. Copies of the D.C. child support guidelines are available for perusal by our D.C. consultees and clients Just ask the receptionist, please).

24.On the other hand, a September 1991 Virginia Court of Appeals decision seems to indicate that men, at least, perhaps should not count on using the Guidelines to get previously-agreed amounts lowered, where the prior amounts were originally, or maybe even, by virtue of changed circumstances, have later become inordinately high. . .

25.The filled-out samples are from the fairfax bar Family Law Section Committee.

26. At the higher tax levels, however, we now lose increasing portions of "personal exemptions"; which is but another matter to be factored in carefully here. . .

27. However, an increasingly frequently used approach to preventing such unexpected results is simply to specify in the Agreement that the child(ren) may lot enforce college provisions over the objections of both of you (if the two of you should later agree to terminate or change the provisions) -- at least with respect to future semesters, after appropriate notice to the child(ren).


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