How to calculate child support in Texas for a 50/50 possession schedule (equal actual parenting time) can be very different from Texas guideline child support with the Texas Standard Possession Order. Contractual alimony (spousal maintenance) can also affect child support.
Let's start with the Texas Standard Possession Order and how Texas guideline child support relates to it. In Texas, the law presumes both parents are fit and they should have frequent and continuing contact with children - but that does not necessarily mean equal parenting time. In fact, it is presumed that the Standard Possession Order is the minimum amount of time that a child should have with a noncustodial parent. The Texas Standard Possession Order gives the custodial parent signficantly more parenting time (measured by overnights) in a year with the children and less time to the noncustodial parent.
Except in limited circumstances, Texas law requires each parent to support a child. Presumably under the Standard Possession Order, the custodial parent incurs more out-of-pocket day to day basic living expenses for the child than the noncustodial parent. Those out-of-pocket expenses for the custodial parent are the custodial parent's contribution to child support. The noncustodial parent pays the custodial parent Texas guideline child support and medical support which supplements the child support the custodial parent already pays and is in addition to the child support the noncustodial parent pays in caring for the child in that parent's household. For new actions on or after September 1, 2018 Texas law also requires the noncustodial parent to provide dental support.
Texas guideline child support is calculated using a formula that requires the noncustodial parent to pay a specific percentage of that parent’s net monthly income as child support. The percentage depends on how many children that parent has to support. In general, the Texas guideline child support formula does not take into account how much money the custodial parent earns or has the capacity to earn. For a list of factors a judge can consider to deviate from Texas guideline child support and for a step by step explanation of how to calculate Texas guideline child support click here.
Texas law provides no official formula to lower child support from the guideline amount when parents follow a 50/50 possession schedule and incur the children’s basic expenses in each of their households more equally than they would under the Standard Possession Order. That means parents will follow Texas guideline child support unless they agree to another way to figure child support or a judge orders a different amount.
If the parents agree to child support by themselves or through lawyers, the judge will review their agreement to see if an amount different from the guidelines is in the best interests of the child. In that case, the judge could override the parents' agreement and substitute his or her own amount of child support. On the other hand, if the parents agree to child support in mediation in a binding mediated settlement agreement, the parents are in control of that decision and the judge cannot make a best interest assessment and change what the parents agreed to.
Options for calculating child support in 50/50 parenting plans are: 1) Parents can agree to an amount of child support (including agreeing to guideline child support that one parent pays the other); or 2) offset each parent’s guideline child support obligation; and 3) if there is alimony (spousal maintenance) too, parents can re-calculate child support based on the change alimony makes to each parent's income.
1. Agree to an Amount of Child Support the Same As or Different from Texas Guideline Child Support
Parents may agree to an amount of child support the same as or different from Texas guideline child support that meets the children’s needs and works for each of them. There is an inherent expectation the Texas guideline child support should be lowered with 50/50 equal parenting time because the lop-sided parenting time of the Standard Possession Order and lop-sided children's expenses in the custodial parent's household go away. The amount of cash that needs to flow from one parent to the other to support the child in each household is determined by the parents' estimation of the child’s expenses in each household, identification of what expenses each parent pays, and evaluation of how much each parent can afford.
If the parents share parenting time equally, share expenses equally, and make the same amount of money, then they could agree to child support of zero. That is because in theory, each parent provides the same amount of child support in the form of paying the children's expenses in each household, and the burden on each parent is the same if they have similar incomes.
The concern comes when a lower earning parent does not make enough money to meet at least the children's basic needs in that parent's household. For example, suppose one parent makes $20,000 per year and the other makes $200,000 per year. The parent who makes the lower income will not be able to provide for the children the same way the higher income parent can. That means there may be significant differences in where the children live with each parent – in a small apartment in a less desirable part of town versus in a house in a safer part of town. Without adequate child support from the higher earning parent, the lower earning parent may not be able to provide the best housing, or nutrition for the child, or pay for good medical care if the child gets sick.
Some lawyers will argue a parent should opt for Standard Possession Order and not accept 50/50 parenting time because equal parenting time could mean the parent would receive less than guideline child support. This is not necessarily true. It is important to remember that each parent who shares 50/50 equal parenting time will have less expenses for the child in each household than if that parent were the custodial parent under the Standard Possession Order, so a lower amount of child support does not necessarily disadvantage that parent.
If one parent makes significantly less money and the other parent agrees in writing in an order or divorce decree to pay the majority of the children’s necessaries and other expenses (daycare, extracurricular activities, private school, etc.), the higher earning parent may pay less than guideline child support or perhaps zero to the lower earning parent.
2. “Offset” Child Support:
Another option for child support for parents with equal parenting time is to calculate what each parent would pay the other in child support if that parent were to be the payer, then take the difference, and award that difference in child support to the parent with the lower income. In this way the parents offset the child support they would owe each other.
For example, suppose Parent A and Parent B have one child and a week on/week off parenting schedule. The parents calculate the guideline amount of child support each would pay on his or her own earnings. After calculating guideline child support, the parents determine Parent A who has a lower income would pay $500 per month, and Parent B who has a higher income would pay $750 per month. Instead of Parent A paying Parent B $500 and Parent B paying Parent A $750, they offset these amounts and Parent B pays Parent A $250 per month ($750 - $500). Remember, Parent A and Parent B are each contributing to paying the children's expenses in their own households and the $250 difference in this example just equalizes the amount of child support between the households.
When each parent is a salaried employee this method of calculation of child support by offsetting is fairly easy mathematically. On the other hand, the offset method can present challenges when deciding how much income is equitable and reasonable to assign to a parent who earns commissions, has not worked outside the home for some time, has had only a part-time job during marriage, or is a full time student. Wages and earnings fluctuate which necessitates parents’ re-comparing their incomes and re-calculating child support on an annual basis and writing into a decree or order how, when, and where the parents will do this.
If the thought of comparing every year how much (or how little) each of you earned relative to each other and of re-calculating child support over and over makes you cringe, then this method of offsetting child support might not be the best option. Moreover, if talking often with the other parent about money and child’s expenses just isn’t going to work, then you might consider re-thinking your 50/50 parenting time which absolutely requires close cooperation between parents on just about everything concerning the children.
3. Ratio of Income and Consideration of Contractual Alimony (Spousal Maintenance)
If contractual alimony (spousal maintenance) is going to be paid, parents can base child support on a ratio of each parent’s income and the amount of alimony paid. Once again this is not an official formula under Texas law but it can be done by agreement of the parties.
For example, suppose Parent A and Parent B have one child. Parent A’s income is $2500 per month and Parent B’s income is $6000 per month. Together they earn $8500 per month. Parent A contributes 29% of the total income and Parent B contributes 71% of the total income.
Parent A $2500 29%
Parent B $6000 71%
Total $8500 100%
The guideline child support amount for a parent earning $8500 per month is $1259.30. If Parent B pays no alimony then Parent B will pay Parent A 71% of $1259.30 or $894.10 in child support.
However, if Parent B pays Parent A $1000 per month in contractual alimony (spousal maintenance), then Parent B’s income decreases by $1000 per month and Parent A’s income increases by $1000 per month. This changes the ratios of their incomes.
Parent A $3500 41%
Parent B $5000 59%
Total $8500 100%
The guideline child support amount for a parent earning $8500 per month is still $1259.30. However, now Parent B will pay to Parent A the sum of $1000 in contractual alimony and 59% of $1259.30 or $742.98 in child support.
Another way to figure this is to add the contractual alimony (spousal maintenance) to the income of the parent who receives the alimony and subtract it from the income of the parent who pays it and then refigure guideline child support on those adjusted incomes and use the offset method above to determine the new amount of child support.
Keep in mind that contractual alimony (spousal maintenance) is tax deductible to the payer and taxable to the receiver for divorces finalized before January 1, 2019 and for modifications after that date to previous contractual alimony (spousal maintenance) orders if the parties agree in writing to continue to apply the old “taxable/deductible” alimony law. The deductibility and taxability of contractual alimony (spousal maintenance), as well as whether a parent qualifies as a custodial parent and receives certain tax benefits will make a difference in the total amount of money that parent will have.
With 50/50 parenting time and more than one child, a plan can be crafted to qualify each parent as a custodial parent of a child which will entitle the custodial parent to Head of Household status, the Earned Income Credit, the Child Care Credit, and the Child Tax Credit. However, in any year a custodial parent can give the noncustodial parent the Child Tax Credit using IRS form 8332. The Child Dependency Exemption was eliminated in the 2017 tax changes beginning in 2018, but it is scheduled to re-emerge in 2025. Stay tuned.
For more information about how these tax rules affect how much money you will have, consult your mediator and if needed, a financial professional in the Détente network or one of your own choosing.
URGENT: Read more here about important tax law changes coming into effect on January 1, 2019 making contractual alimony (spousal maintenance) non-deductible to the payer and nontaxable to the receiver. Deductible alimony must have been covered in a written separation agreement or included in a finalized divorce by December 31, 2018.
Final Note: As mentioned above, if the amount of child support is decided in mediation and included in a valid, written, and signed mediation agreement, a judge cannot do a “best interest” test of the child support for the children and substitute the judge’s own judgment of the child support amount for the parents’ agreement. However, if the parties agree to an order under which the amount of child support differs from the amount that would be awarded in accordance with the child support guidelines, the court later may modify the order only if the circumstances of the child or a person affected by the order have materially and substantially changed since the date of the order. But the judge will send the parents to mediation before stepping in to make a ruling on child support so parents might as well try to reach agreement in mediation first. Parents on both sides need to be wise and remember it takes a trial to get a court to make a decision about child support. Lawyers' and experts' fees to prepare for and to appear at a trial may well cost much more than the child support amount in dispute.