Self-Employment Income and Child Support

The Massachusetts Child Support Guidelines are particularly wary of payors and recipients of child support that are self-employed, because of the risk of manipulating income figures to deflate or inflate a child support obligation.  The weekly figure used to calculate child support is not necessarily a self-employed individual’s gross income from the prior year divided by 52:

IMomPopGeneralStoreSign-300x206ncome from self-employment, rent, royalties, proprietorship or a business, or joint ownership of a partnership or closely-held corporation, is defined as gross receipts minus ordinary and necessary expenses required to produce income.  In general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine the appropriate level of gross income available to the parent to satisfy a child support obligation.  In many cases this amount will differ from a determination of business income for tax purposes.  The calculation of income for purposes of this section may increase gross income by certain deductions or other adjustments taken for income tax purposes.

Expense reimbursements, in-kind payments or benefits received by a parent, personal use of business property, payment of personal expenses by a business in the course of employment, self-employment, or operation of a business may be included as income if such payments are significant and reduce personal living expenses.

Massachusetts Child Support Guidelines I(C) (2013).

If you have any questions about child support in Massachusetts, contact the attorneys at Finn & Eaton, P.C. in Woburn and Saugus by calling 781 484-1066, or by sending an email to schedule a free initial consultation.