Determining income for child support or alimony purposes in Michigan often requires looking beyond the tax returns. So what is considered income for support in Michigan?
Income for support and the 2021 Michigan Child Support Formula Manual
Chapter 2 of the 2021 Michigan Child Support Formula Manual is a good resource in how to determine income for support.
- Section 2.02 addresses seasonal, annual variation of income, inheritences and gifts;
- Section 2.03 addresses children’s income;
- Section 2.04 addresses Means tested income;
Determining income for support – looking beyond the tax returns
For many business owners or self employed individuals there is a cash aspect to a business that may not be reflected on a tax return. While it is sometimes hard to trace cash proceeds, if an individuals expenses exceed his/her income (with little debt to show for it), it is a good indication that there is a cash aspect to a business.
In addition, many business owners or self employed individuals run personal expenses through a business. These personal expenses will be hidden on a tax return as an expense, however, these “expenses” may actually be income for support.
In addition, perks such as deferred compensation, an auto allowance, retirement contributions, housing allowances may never appear on a tax return but in many cases are income for support purposes.
While the Michigan child support formula manual provides a “formula” for calculating child support, if a party fails to accurately determine income for support, the formula less meaningful. Although there is no rigid formula for calculating alimony or spousal support, one factor which is always considered is the income of the parties. So special care should always be taken in determining income for support purposes.
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By: Daniel Findling