How to compute child support in Wisconsin
There are two formulas for calculating child support in the state of Wisconsin; If a parent has primary placement, defined as 75% of the time or more, the non custodial parent pays a percentage of their gross monthly income, starting at 17% for one child and ending at a cap of 34% for 5 or more children.
When parents share or have equal placement, there is a different formula that calculates child support that looks at both parties’ gross monthly income, and the percentage of time that they both spend with the children.
What do you need to run these calculations? Do you look at a current check stub? Do you look at last year’s tax returns? Would a year to date check stub be more accurate?
The starting point when running a child support calculation is a year to date check stub. This will show both gross and net monthly income to date. Why is this the most accurate way of calculating child support? The reason is that it considers all sources of income to date, including overtime, bonus, commission and all other sources. If one looks at simply one check stub from earlier in the year, it may not be accurate in terms of looking overall, what the person has made throughout the entire year.
Another consideration in computing child support is looking at what the person made last year. Reviewing their 1099s and W2s, along with a complete copy of their federal and state income return is important as well because it lets you know what the person made last year, and you can compare that with what they are making now to determine if it is compatible with last year’s earnings, or if there is an explanation why their income this year is dramatically different from what it was in the previous year.
If a person is self-employed and doesn’t necessarily receive a regular year to date check stub, you will want to go back further than simply last year’s tax returns to see what the person has been earning. Normally, whether someone is self employed or not, we are looking at two years of the preceding year’s tax returns for looking at their income and consistency with what they may be earning now. For someone self employed, you may need to look at 3-5 years worth of prior tax returns to see what type of an income they have been making.
In addition to their tax returns, one should request their profit and loss statements (P &L) for the previous month, previous quarter and year end of the preceding last two years.
If you have questions on what documents you should be looking at to calculate child support, contact the experienced family lawyers at Karp & Iancu, S.C. today.