In this episode: Child support is about the children, not the spouses. Jon Peyton explains how states calculate it, why there’s less room to negotiate than with alimony, how payments change and end, and what happens when a parent falls behind.
Key insights
- Child support aims to keep the children’s lifestyle as close as possible to what they had, though an exact match is rarely possible.
- Most states use a formula based on both parents’ incomes, and many publish an online calculator.
- Unlike alimony or a property settlement note, child support usually leaves little room to negotiate.
- Payments aren’t deductible for the payer or taxable to the recipient.
- Support usually ends at the age of majority, often 18, but some states extend it, and either parent can ask the court to adjust it when incomes change.
- Missed payments can be collected through wage garnishment and tax refund offsets.
Episode timeline
- 0:00 Introduction
- 0:35 Child support is about the children
- 1:04 The children’s lifestyle before the divorce
- 2:06 Why an exact match isn’t guaranteed
- 3:26 State child support calculators
- 3:56 Example: sharing support by income
- 6:20 How support gets spent
- 8:20 Adding up alimony, child support and a note
- 10:15 How child support is taxed
- 10:45 When child support ends
- 11:50 Adjusting payments when incomes change
- 13:55 When a parent falls behind
- 15:25 How garnishment works in practice
- 18:50 Planning for when support stops
The episode in brief
About the children. Alimony is for a former spouse. Child support is for the children. Its goal is to keep their lifestyle as close as possible to what it was: the trips, the travel sports, the private school, the meals out. Jon is direct that an exact match is rarely possible. What’s realistic depends on the lifestyle you had and the incomes involved.
How it’s calculated. It depends on your state, and most states publish a child support calculator; search for your state’s name and “child support calculator.” Jon’s illustration: one parent earns $200,000 and the other $50,000, for $250,000 combined. Suppose the state’s formula sets support at $1,000 a month per child at that income. The lower earner brings in 20% of the household income, so they’re responsible for $200. The higher earner is responsible for $800. The numbers are hypothetical; the point is that the obligation is shared according to income.
How it’s spent. In Jon’s experience, the parent receiving support usually doesn’t have to account for how it’s spent. It goes to the child’s overall lifestyle: food, housing, activities. Some states or agreements may require more.
Little room to negotiate. Alimony and property settlement notes can be negotiated. Child support mostly comes from a formula, though there may be some flexibility when payments are large. If you’re the payer, add up child support, any alimony and any property settlement note. If the total is more than your cash flow can support, you may need to ask the court for relief.
Taxes. Child support isn’t deductible for the payer and isn’t taxable to the recipient.
When it ends. Support typically ends when the child reaches the age of majority, usually 18. Some states have rules that can extend payments past that point, which could keep you paying longer than you expect. Ask your attorney how your state handles it.
When incomes change. Either parent can ask the court for an adjustment. If the payer’s income rises, the recipient may ask for more. If it falls, the payer may ask for less. In Jon’s example, if the lower earner’s income rises to $75,000 and the higher earner’s falls to $150,000, combined income drops to $225,000, and the split shifts to roughly one-third and two-thirds.
When payments stop. Child support is a legal obligation, and states enforce it. In Virginia, for example, a state agency can garnish the payer’s wages once the support order is submitted and the payer’s income is verified. Garnishment follows the payer’s pay schedule and is usually a percentage of each paycheck, so amounts can vary from month to month. Arrears can also be taken from a tax refund, and any balance still unpaid when the child turns 18 remains owed.
Plan for the end. If you receive both alimony and child support, the combined amount can be significant: $2,000 a month in alimony and $1,500 in child support comes to $42,000 a year. When those payments end, often a few years apart, you need to be ready to support your lifestyle without them.
Key action items
- Run your state’s child support calculator with both incomes to estimate the amount.
- If you’ll pay, total child support, alimony and any property settlement note against your take-home pay.
- Ask your attorney exactly when support ends in your state and what could extend it.
- If you’ll receive support, plan for payments that vary when they come through garnishment.
- Map out the dates when alimony and child support end, and build your budget around them.
Listen next: Episode 14: The Contract You’ve Been Waiting to Sign
Jon Peyton previously held the Certified Divorce Financial Analyst® (CDFA®) designation and no longer holds it. References in this episode reflect his credentials at the time of recording.
This episode is educational and isn’t legal, tax or financial advice. Speak with your own attorney and advisers about your situation.