How Child Support is Calculated in California in 2018
If you are negotiating child support in California you should know that unless you ran the calculation after April 2, 2018 to take into consideration the 2018 changes created by the Tax Cuts and Jobs Act your calculations are no longer correct.
Additionally, if you think the new tax law might impact what you are paying or receiving in child support it is now time to check your calculations with your divorce mediator or attorney. Many of us use the CalSupport program and it was just updated this week and the changes may affect what you are paying or receiving.
This is the warning Nolo Press sent to all professional users of their child support calculator program to be in compliance with the California Judicial Council:
All previous 2018 child support calculations are no longer correct.
For over 20 years, the Judicial Council has required support calculators to use the
latest tax year for which a complete set of rates, rules and forms is available. That has always meant child support calculations were based on the prior year's tax rates and law. But this year, the Judicial Council decided that the federal tax changes from the Tax Cuts and Jobs Act be included in the calculator, which means that all child support calculators must update their program to default to the 2018 tax tables.
Here are all the changes you will find in the updated version:
Updated the tax tables
Changed the Child Tax Credit amount to $2,000 per child
Made the Child Tax Credit refundable, at 15% of earnings minus $4,500, up to $1,400
Changed the Child Tax Credit to phase-out amount to $400,000 for Married Filing Jointly and $200,000 for all others
Removed the personal exemption amount
Removed the Additional Child Support Credit
Modified the State and Local Tax deduction to $10,000
Modified the Alternative Minimum Tax to the new exemption levels ($70,300 for single or Head of Household, $109,400 for Married Filing Jointly and $54,700 for Married Filing Separate
Modified the exemption phase out base to $1,000,000 for Married Filing Jointly and $500,000 for all others
Updated the 26% / 28% threshold to $95,750 for Married Filing Separate and $191,500 for all others
Adjusted the IRS Earned Income Credit for tax year 2018
Even if you did not mediate your divorce with Leave strong Divorce Services, Laura can help you if your child support needs a review and a modification. Many people think they have to go undergo costly legal fees to modify child support and that's just not the case. Find out if you are paying or receiving the correct amount of child support by booking a complimentary Discovery Session with Laura today.