How is child support calculated when a parent is self-employed?

Child support in Michigan is calculated differently if the parent is self-employed compared to if they have a regular salary from an employer. When the parent is self-employed, their support obligation is based on their total net income from their business. This means that their total net income is calculated after deducting allowable business expenses. The parent must document their net income with tax returns, financial statements, business records, and any other documents that are necessary. Once their net income has been determined, the guidelines are used to calculate how much they should be paying in support. This includes factors such as the number of children, the number of overnight stays with each parent, and other factors. Self-employed parents must also seek professional advice from a tax accountant and/or a lawyer to ensure they are adhering to state and federal laws. Other considerations include seasonal income, one-time income, and deductions which may affect the parent’s obligation. Michigan law also requires that self-employed parents provide documentation to prove their income and expenses over a certain period of time, so it is important that they keep good records in order to comply with the law. The Michigan Department of Health and Human Services has provided helpful documents and resources to assist self-employed parents in understanding their obligation and how to calculate child support payments when they are self-employed. Following these guidelines will ensure that self-employed parents are meeting their child support obligations in Michigan.

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How is child support calculated when a parent is self-employed?

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