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

In North Carolina, child support is typically calculated through the North Carolina Child Support Guidelines, which take into account a variety of factors when determining child support. As such, when a parent is self-employed, the calculation is slightly different. First, the court must calculate the self-employed parent’s “income capacity,” which is determined by taking into account the parent’s historical and current income. To determine this income capacity, the court may assess the parent’s “actual net income” from their business, which includes the value of goods and services the parent receives as part of their self-employment, as well as a number of other sources of income. This actual net income is then used to calculate the parent’s income capacity. Next, the court must adjust the income capacity to account for any expenses a self-employed parent may incur as part of their self-employment. To do this, the court may consider items such as business expenses, health insurance payments, investment losses, and other similar expenses. Depending on the circumstances, a self-employed parent may be able to use these expenses to reduce their income capacity for the purposes of calculating their child support obligation. Finally, the self-employed parent’s income capacity is plugged into the North Carolina Child Support Guidelines to determine the parent’s child support obligation. This number is then adjusted to take into account any other relevant factors, such as the number of children, the number of overnights the parent has with the child, and any special needs the child may have. Once all of this is taken into account, the court will issue a final order for the payment of child support.

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

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