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Guide to the Montana Online Child Support Calculator


Make Sure the Calculator is Right for You

The calculator is not for everyone. You need to read all of the information below. If you do not read the following information, you may get an incorrect calculation or a calculation that you cannot use for your case.

The calculator is for people who need to calculate a child support amount they owe or are owed.

The calculator is for people who need the child support amount because they are filing one of the following types of court documents:

Petition for Dissolution with Children in a Montana District Court, or Petition for Parenting Plan in a Montana District Court, or Modification of Child Support Order in a previous Dissolution with Children

or Parenting Plan case in a Montana District Court

More about the calculator:

The calculator is for people who know both their own and the other parent’s incomes and financial situations.

The calculator will NOT calculate your taxes or calculate a medical support order.

The calculator does NOT currently calculate temporary income. If you have temporary income, please do not use the calculator as you may get an incorrect result.

The State of Montana Child Support Enforcement Division (CSED) can calculate child support in many situations. See http://dphhs.mt.gov/CSED.

Some private attorneys can also calculate child support.

Guide to Montana Online Child Support Calculator – page 1 of 14

http://dphhs.mt.gov/CSED


The calculator may not be right for you if you have a complicated case or situation. It cannot take the place of a lawyer’s legal advice or information from CSED. If you don’t know whether you should use the calculator, please talk to a lawyer or CSED before using it.

The Montana Legal Services Association (MLSA), the creators of the calculator, and CSED don’t claim or guarantee that using the calculator will help you get what you want. MLSA and/or CSED are not responsible for what happens if you use the calculator.

Confidentiality

Please be careful with your personal information when using a computer. Make sure you log out and close all programs when you’re done and close all documents. Restart or shut down the computer when you are finished. Remember that even clearing a computer’s history does not totally erase your computer trail; someone might still be able to track the websites you visited and/or read the websites and documents you created.

If someone is trying to keep track of what you do, it could be dangerous for you to use the calculator. For information on how to use computers safely, please contact the US National Domestic Violence Hotline at 1-800-799-7233 and TTY 1-800-787-3224.

Gather Information

It will be much easier for you to use the calculator if you gather information before you begin. Some of the information you will need is listed below. You will also need some of this information for the other parent:

Paystubs Self-Employment income Tax returns Child daycare costs Medical expenses for you and your child Children’s unreimbursed medical expenses



Dependent benefits Health insurance premiums Long-distance parenting transportation costs Employment names and dates Unemployment income, workers’ compensation, Social Security

benefits, retirement, interest/dividend income, reimbursements, grants, noncash benefits from employers

Tax deductions (Federal, state, FICA, Medicare, retirement, work costs)

Understand How to Use the Calculator

The calculator is hosted by the www.LawHelpInteractive.org website. We strongly encourage you to create an account on the website. You can only save your answers and forms if you create and log into your www.LawHelpInteractive.org account before you start answering questions.

The calculator will allow you to create Financial Affidavits and/or Child Support Worksheets

The calculator can be found through www.MontanaLawHelp.org at this link: http://bit.ly/MTChildSupportCalculator

To use the calculator, you work your way through a set of questions and type in your answers. Once you have finished, the program will compile your answers and calculate child support. You can save your answers if you have created an account. You can also print or email your documents.


http://bit.ly/MTChildSupportCalculator

http://www.MontanaLawHelp.org/

http://www.LawHelpInteractive.org/

http://www.LawHelpInteractive.org/


Know Where to Turn for More Information

Information: Definitions, explanations, and other Help for the calculator can be found in

the pages at the end of this Guide. Hardcopy Financial Affidavit and Child Support Worksheet forms can be

found at the Montana Child Support Enforcement Division website at: http://dphhs.mt.gov/CSED

Organizations: The State of Montana Child Support Enforcement Division (CSED) can

calculate child support in many situations. See http://dphhs.mt.gov/CSED.

Montana Legal Services Association (MLSA) helps low-income people with civil legal problems. Apply online or call the HelpLine at 1-800-666-6899 Monday-Thursday 7:30am-6:00pm and Fridays 8:00am-5:00pm.

The State of Montana Law Library can help with legal research and information. See http://courts.mt.gov/library or call (800) 710-9827.

The Court Help Program can provide general information. See: http://courts.mt.gov/selfhelp.


http://courts.mt.gov/selfhelp

http://courts.mt.gov/library

http://dphhs.mt.gov/CSED

http://dphhs.mt.gov/CSED%20


Help for Understanding the Questions

The calculator has many questions that include legal and technical words and terms. The information below defines and explains many of the words and terms so that you better understand how to answer the questions.

“HELP” For Montana Legal Services Web Calculator

The following pages are intended as a guide to the child support worksheet interview screens although they do not guarantee an accurate calculation. The responsibility to correctly apply the child support guidelines rests with the user and it may take more than one worksheet to get it right. Due to multiple points of view or expectations for a change in circumstances, it is not uncommon to prepare more than one child support worksheet for a case. For example, when the parents alternate years claiming the children’s tax exemptions, it has become customary in Montana to prepare one child support worksheet with income taxes based on mother claiming the exemptions and a second worksheet with income taxes based on father claiming them. The child support is set at the average of the two support amounts rather than change the support amount due each year.

In addition, the guidelines include a rule, at ARM 37.62.140 Anticipated Changes, which provides for production of additional worksheets if the parties’ or children’s circumstances are expected to change within 18 months of the calculation. This rule is intended to address changes such as the expected birth of a child to one or the other parent, emancipation of one or more children, a change in child care expense or the beginning or end of such expense, a parent’s completion of an educational degree program or temporary job, and so on.

You will need the following documents or information for each parent to complete the interview for the child support worksheets : [All references to specific forms are to Internal Revenue Service (IRS) forms which may be found at www.irs.gov. Enter the form number (Form 1040, for example) or publication number (Publication 596) in the search box on the IRS Home page for best results.]

A completed child support guidelines financial affidavit or the information contained in it; Federal tax returns (Form 1040, 1040A, or 1040EZ) and state tax returns, including W-2 and 1099 forms

for the past three (3) years; Copies of partnership (Form 1065) and/or corporation (Form 1120 or 1120S) tax returns for the past three

years, if a party is self-employed or receives income/losses from an interest in a partnership or corporation;

If depreciation expense is deducted on a tax return (Form 4562), a copy of the supporting depreciation schedule or summary for each year’s return. The depreciation schedule/summary is not an IRS tax form and is a document usually kept by the tax preparer and updated each year;

Pay stubs or payroll advice for the past three months; Child care expense for “children of the calculation” and “other children” (see Definitions, below) in the

parent’s household; the expense must be necessary for the parent’s employment; Health insurance premiums for each parent, each child of the calculation and each parent’s “other

children”; only the annual out-of-pocket cost (premium less subsidy) paid by a parent is allowed; Mandatory retirement contributions through the parent’s employer; Alimony ordered by court or administrative order; Child support ordered by court or administrative order for “other children”; Required employment expense, such as union dues, safety equipment, use of personal vehicle, etc. not

reimbursed by the employer or other party; Cost of tuition, books, and mandatory fees for post-secondary education (IRS Form 1098-T) and a record

of scholarships and grants accepted/received by the student parent;


http://www.irs.gov/


Interest expense of student loan repayment (IRS Form 1098-E) where the child has benefitted from the parent’s education.

DEFINITIONS: “Child of the calculation” means a child who is the subject of the calculation and who is the child of both parents shown on worksheet A, page 1.

“Other child” means a child who is not the subject of the calculation and who is the child of only one of the parents shown on worksheet A, page 1. (See ARM 37.62.103 for this and other

definitions of terms used in the child support guidelines, part of the Administrative Rules of Montana (ARM) at Title 37, Chapter 62, Subchapter 1).

START THE INTERVEW, see below, is the name of the first interview screen for the child support worksheets. Each screen is named and that name is repeated here in this guide to assist the user with information about the questions on that screen.

START THE INTERVIEW“Child Support Worksheets” will produce Montana child support guidelines worksheet A in every case and will

include worksheet B when the parenting arrangement requires it. Worksheet B applies in the following situations:1. One or more children reside with each parent more than 110 days per year (in other words, at least one

child spends more than 110 days with mother and more than 110 days with father, in the same year); 2. In a family with at least two children, one child resides primarily with mother and another child resides

primarily with Father. Neither child spends more than 110 days per year with the other parent.

The child support guidelines also include worksheets C, D, and E but they are used only in a manual calculation, not in a computer calculation, and cannot be printed or viewed from this site. [See the Child Support Enforcement Division (CSED) web site at www.childsupport.mt.gov Then, Publications → Child Support Guidelines Packet →

Worksheets, to view/print worksheets C, D, and E.]“Financial Affidavit” will produce a five-page document designed to gather the information from the parents

necessary to complete the child support worksheets. It is not a required form unless CSED or the District Court (DC) requests that you complete it so that CSED/DC can complete a calculation for you. The Affidavit (a sworn

statement) may also make it easier to collect the information from the other parent if you are preparing your own calculation.

Establish or ModifyIf a child support order has never been issued for the children in the family, click the ESTABLISH button. If a child support order has already been issued but needs to be reviewed for possible changes, click the MODIFY button.

Case or Cause NumberIf CSED has assigned a case number to your application for services or if the District Court has assigned a cause number to your petition, enter the number here. If you have both numbers, enter both separated by a “/”.

Who Are You?The parent who checks the box “I am Mother/Father” is referred to as “you” or “your”, as in “Your Income or Your Employment”. The other parent is referred to as “other parent” or by name, once his/her name is entered.

YOUR INFORMATIONEnter your full first and last names and middle initial. If you are Father, select a suffix (Junior, II, III, etc.) if part of your legal name.

THE OTHER PARENT’S INFORMATIONEnter the other parent’s full first and last names and middle initial. For Father, select a suffix (Junior, II, III, etc.) if part of his legal name.

CHILDREN YOU HAVE WITH THE OTHER PARENT


http://www.childsupport.mt.gov/


Minor children are those who have not yet reached the age of majority. In Montana, “child” is defined by state law - §40-5-201 MCA - as follows:

“(2) (a) "Child" means: (i) a person under 18 years of age who is not otherwise emancipated, self-supporting, married, or a member of the armed forces of the United States; (ii) a person under 19 years of age and still in high school; (iii) a person who is mentally or physically incapacitated if the incapacity began prior to the person's 18th birthday; . . .”

YOUR FIRST CHILDEnter your oldest child’s full first and last names and middle initial. If a male child, select a suffix if part of his legal name. Full date of birth is required. If the child is emancipated, married, or a member of the U.S. armed forces, he or she is not eligible for child support.

YOUR SECOND CHILDInclude the same information as required for Your First Child, above. Complete as many child screens as necessary to enter all of your children with the other parent (second child, third child, etc.)

YOUR OTHER CHILD / OTHER PARENT’S OTHER CHILD“Other child” means a child whom a parent is legally obligated to support but who is not the subject of the child support calculation. (See link to Definitions at the bottom of the interview screen.) An “other” child is a child of one of the parents in the support calculation but not a child of both parents. Either or both parents may have “other” children. A step-child is not considered an “other” child. NOTE: If the parent has a child who does not live with him/her and the parent is not ordered to pay child support for the child, that child can be included as an “other” child only if the parent can show that child support is actually being paid to the child’s custodian.

EXAMPLE: Deduction for Other ChildrenDave is the father of three minor children: Susan, Robert, and Mary; each child has a different mother. Mary, age

12, is the child of the calculation and her child support is being reviewed for modification; she currently resides with her mother, Karen. Susan is the oldest at 15, her mother is Anna and Susan currently resides with her father, Dave.

Robert is 10 and he resides with his mother, Sharon. Dave is not ordered to pay child support for Robert and he does not make any voluntary payments to Sharon. Dave is allowed a deduction for the other child allowance for

Susan because she resides with him. He cannot deduct an “other” child allowance for Robert because Robert does not reside with Dave, there is no support order for Dave to pay for Robert , and Dave makes no voluntary child

support payments. Since Mary is a child of the calculation, she does not qualify as an “other” child. In this example, Dave can claim only one “other” child: Susan. [See ARM 37.62.110(1)(b)(ii)]

YOUR SECOND OTHER CHILD, ETC. / OTHER PARENT’S SECOND OTHER CHILD, ETC.See Your First Other Child / Other Parent’s First Other Child, above. Enter the requested information for each child. A full date of birth is required. If the child is emancipated, married, or a member of the U.S. armed forces, he or she is not eligible to be included in the calculation.

YOUR EMPLOYMENT / OTHER PARENT’S EMPLOYMENT (See Discussion of Income, below) Answer “yes”, if you work one or more hours per month for another person or a business that pays you for your work by the hour, day, week, month, or by the amount you produce.

ENTER INFORMATION FOR YOUR CURRENT JOB / ENTER INFORMATION FOR OTHER PARENT’S CURRENT JOB (See Discussion of Income, below.) If you have more than one job, enter information for each job separately. When you complete the first job screen, click on “Add Another Job” until you have entered all your current jobs. Complete the information for all your jobs before you move to the next interview screen, called Your Other



Income. There, you can enter self-employment income, bonuses, prizes, awards, or any other taxable or non-taxable income.

YOUR OTHER INCOME / OTHER PARENT’S OTHER INCOME (See Discussion of Income, below)Self-employment: Ideally, the entry for self-employment income is based on at least a three-year average of the net earnings shown on Schedule C (Business Income, Form 1040), Schedule F (Farm Income, Form 1040), or the ordinary income line on a K-1 form provided by a partnership (Form 1065) or other business that reports income on Form 1065. Do not enter income/loss from an S corporation (Form 1120S) here. S corporation income/losses are entered in Other Taxable Income, below. If depreciation expense is claimed as a deduction from income but is not calculated by the Straight Line method, the amount may have to be adjusted; see Depreciation Adjustment, below.Pensions, Retirement: Enter annual distributions received from all pensions, including VA and military, IRA accounts, Railroad Retirement, and all other retirement funds, whether public or private. If an IRA is closed and rolled over into another IRA, there is usually no income for child support in such a transaction unless the amount rolled over is less than the total amount, meaning a distribution has been made. The distribution may be taxable or non-taxable depending on the type of IRA account but, either way, it is most likely income for child support. Enter Social Security retirement benefits on the line following (see below).Social Security Retirement and Survivor’s Benefits: Enter only Social Security retirement and/or survivor’s benefits. Do not enter Social Security Disability benefits here; enter below, at “Other Non-taxable income”. Do not enter Supplemental Security Income (SSI) benefits received by a parent or a child anywhere in this calculator: SSI is not considered income for child support. See Other Non-Taxable Income, below, for instructions regarding Social Security benefits received by a child on behalf of a disabled parent.Interest/Dividends: Enter annual amounts received for interest and dividends from any source.Other Unearned Income: Enter the amount of royalties, annuities, trust income, and similar funds received. Imputed Income: Imputed income is income not actually earned by a parent but attributed to the parent based on his/her ability to earn income. Enter the gross amount of income the parent could earn if employed full-time (usually 40 hours/week) at the highest rate of pay the parent can realistically earn. Consider the jobs available in the area where the parent lives. If the parent is working but not working full-time, enter the parent’s actual wages/earnings on the appropriate income line. Determine if the parent can realistically work more hours and earn a higher income. If so, subtract the actual or average hours worked each week from 40 hours to determine how many hours to impute. Multiply the imputed hours by the rate of pay the parent could earn if the hours were worked and enter the total here. See, also, ARM 37.62.106 Imputed Income for Child Support, which includes provisions, at paragraph six (6), why income should not be imputed in some cases.

In 2002, the Montana Supreme Court decided a case in which child support and, specifically imputed income, was at issue. The following statement, written by Justice Terry Trieweiler in the final Opinion, gives us the Court’s take on imputed income:

“The end sought is equity and accuracy in determining income of the party charged with child support obligations, while serving the best interests of the child. It would serve no one’s best interests to attribute unrealistic income to a parent. If we expect a parent to meet both his needs and the needs of the children, child support calculations must be realistic.”

Because child support is for children, it must not be used to punish the paying parent by setting an obligation that he/she cannot pay. Child support payments that are unfair to either parent may have consequences for the parent’s relationship with the children and should be avoided whenever possible.

If the rate of pay for imputed income is not the same as the parent is currently earning or if the parent is currently unemployed, determination of the amount to impute should come from a reliable source. The Montana Department of Labor & Industry (DOLI) participates in a national series of wage estimates called the Occupational Employment Series (OES), administered by the federal Bureau of Labor Statistics (BLS), in which all states report wages in occupational categories. The BLS organizes the data and reports it back to states in the form of average wages for the various occupations. To access the OES data, go to the



following site and select the state for which you want information. The most recent information will be about a year old due to the time it takes to gather and process the data. http://stats.bls.gov/oes/current/oessrcst.htm

Following is a sample of the occupational categories included in the data. Click on the links shown in blue to view the survey results.

25-0000 Education, Training, and Library Occupations

27-0000 Arts, Design, Entertainment, Sports, and Media Occupations

29-0000 Healthcare Practitioners and Technical Occupations

Each includes the specific occupations that make up the category and for each occupation a line of data follows that contains the “mean hourly wage” and “annual mean wage”. Mean, in this context, indicates “average” and the number of positions averaged is listed under the heading “Employment”. If you enter imputed income in this calculator, it is recommended that you use the OES data unless better information is available in a particular case, such as an advertised wage for a particular job for which the parent is qualified, for example, or earnings for a job the parent left, in the recent past, without good cause. In the example that follows, George can work more hours for his current employer if he chooses so it is not necessary to consult the OES data to impute income to him.

EXAMPLE: Imputed IncomeGeorge works 30 hours/week as a waiter. He could be working 40 hours/wk. as work is available at the pay he is

currently earning. George earns $10 per hour plus approximately $7.50 /hour in tips for a total of $17.50/ hour for 30 hours/week or $525/week. For 52 weeks at $525/week, George earns a total of $27,300 per year. Because he

could be working 40 hours/week, income should be imputed to him for the remaining 10 hours per week, as follows: Multiply $17.50 x 10 hours x 52 weeks for a total of $9,100 per year and enter the amount as imputed

income for George. The actual income plus the imputed income will total $36,400/year.

Earned Income Tax Credit (EIC): Enter the amount of the tax credit from the most recent federal tax return if that amount is accurate for the future. If not accurate, estimate the EIC amount the parent is eligible to receive according to IRS Schedule EIC and the EIC Table (IRS Publication 596) and enter here. Do not enter the credit based on a parent’s imputed or unearned income. The credit must be calculated on earned income, only. Prize, award, settlement, or other one-time payment within the past 12 months: Enter any one-time payments not already entered. Because these payments will not take place every year, it may be necessary to complete more than one child support calculation. The first calculation would include the one-time payment and the second calculation would not. See, also, ARM 37.62.105(2)(a) regarding spreading one-time payments over a period of years.Bonus: Enter any one-time or regular payments of bonuses as income to the recipient.Other Taxable Income: Enter the gross amount of any taxable income not already entered, such as rental property income or income from an S corporation. Also, enter the amount of scholarships or grants, but not loans, received by a student parent that exceed the qualified tuition and related expenses found on IRS Form 1098-T (Tuition Statement); only the amount of scholarships and grants that exceeds qualified tuition and related expenses is taxable. Also enter Social Security Disability benefits received by a parent but do not enter the amount(s) received by the children on behalf of the disabled parent. See ARM 37.62.144 of the guidelines for instructions regarding the amount received by a child of the calculation.Other Non-Taxable Income: Enter the amount of non-taxable income received, such as tax-exempt interest. Include the amount of any tax-deductible expense that is not allowed for child support such as accelerated depreciation on business assets; enter the non-taxable portion of scholarships and grants. [See ARM 37.62.105(2)(d)]None of the Above: Check this box if you don’t receive any of the types of income shown on the list under Your Other Income. This will confirm that you intended to leave all boxes blank.


http://stats.bls.gov/oes/current/oessrcst.htm


YOUR EXPENSES FOR YOUR CHILDREN WITH OTHER PARENT / OTHER PARENT’S EXPENSES FOR HIS/HER CHILDREN WITH YOUExpenses entered here will be shown at line 12 of child support Worksheet A and are divided between the parents according to each parent’s percentage (line 9) of their combined income (line 8). Child care cost less dependent care tax credit: Determine the total amount of child care expense you paid for children of the calculation as well as your “other” children that was necessary so you could work. Determine the amount of annual tax credit you have received or will receive according to IRS Form 2441, Child and Dependent Care Expense. Subtract the amount of the tax credit from the total amount of child care expense and divide the amount remaining by the number of children who receive care to determine a “per-child” amount. If the children do not receive equal amounts of care, determine each child’s percentage of the total care less the same percentage of the tax credit. The maximum amount of child care expense eligible for the tax credit is $3,000 for one child and $6,000 for two or more. While there is no upper limit on child care expense in the child support guidelines calculation, the amount entered must be “reasonable” and necessary for the parent’s employment.

Health insurance premium: Determine the net (after subsidy), annual amount of health insurance premiums you pay for your children’s benefit. If the insurance policy costs are broken out for adults and children, use only the amount attributable to adding the children to an existing policy and divide the amount by the number of children covered for a “per-child” amount. If no breakdown of the premium is available, divide the total premium by the number of people covered for a “per-person” amount. Enter here only the annual amounts for the children of the calculation.

Unreimbursed medical expenses over $250/year: Determine the annual total of unreimbursed health care expenses for each child that are “recurring and predictable”. This means you are reasonably certain the expense will occur every year and the amount will not be less than the amount you enter. An example of a “recurring and predictable” expense is a child with diabetes whose testing supplies are paid out-of-pocket. The amount you enter should be based on documented costs from previous years or a reliable estimate of expected costs in the future. Do not include one-time expenses such as a broken bone or tonsillitis. For each child with recurring and predictable annual expenses, subtract $250 and enter the remainder.

Other needs/expenses of the child: If the parents are in agreement, there are many possible entries in this category. For example, sporting equipment, travel to games and tournaments in sports as well as academic pursuits, tutors, special educational opportunities for exchange students and other travel, an automobile for the child plus the cost of insurance and fuel, private school tuition, and many others. In any case, it will be the district court judge’s decision regarding which, if any, of those expenses will be allowed in the calculation of support.

YOUR ALLOWABLE DEDUCTIONS / OTHER PARENT’S ALLOWABLE DEDUCTIONS Ordered child support for other children: Enter the annual amount of child support ordered by a court or administrative agency for a parent’s “other” children (not for the children of this calculation).Ordered alimony/spousal support: enter the annual amount of alimony/spousal support a parent is ordered to pay to any other party, including the other parent in the calculation.Ordered health insurance premium for other children: Enter the annual amount of health insurance premiums paid for children who are not the subject of the calculation, unless the premiums are included in the child support deducted, above, at Ordered child support for other children.Federal Income Tax: Enter the annual federal income tax due on the income entered for this party. If income is taken from a recent tax return, enter the income tax paid from the same return. If income was averaged, enter the average of income tax paid for the same years. If tax returns are not available, use IRS Publication 15 (also known as Circular E) to determine the amount of tax to enter. Note: If available tax returns are Married Filing Jointly (MFJ), determine the tax return income for each party. Calculate each party’s percentage of the total income (each parent’s income divided by total income) and use the same percentages to calculate the amount of income tax liability shown on the return for each party. For example: Mother’s annual income is $22,500 and Father’s income is $40,000 for a total of $62,500. Mother’s income, $22,500, divided by total income, $62,500, = .36, or



36%. Father’s income, $40,000, divided by total income, $62,500, = .64, or 64%. To determine each party’s share of income tax, multiply the total income tax on the tax return by .36 for Mother and .64 for Father.State Income Tax: Enter the annual Montana or other state’s income tax on the income entered for this party. Use the tax amount from the tax return or average multiple years’ taxes if income was averaged. See example, at Federal Income Tax, above, to determine how to divide the income tax if the parties filed jointly. Social Security/Medicare: Enter the amount of social security/Medicare contributions withheld from gross pay according to the W-2 form(s) or final pay stub of the year. If documents are not available, calculate the amount according to IRS Publication 15 (also known as Circular E). Mandatory Retirement Contributions: Enter the amount of mandatory (required by the employer) contributions from the W-2 form or the statement provided by the employer. Normally, 401(k) plans are not mandatory.Required Employment Expense: Enter the cost of necessary items provided by the parent in order to do his/her job that are not reimbursed by the employer. Such items include safety glasses, work gloves, uniforms, and mileage if personal car is used multiplied by the IRS business mileage rate found in guidelines Table 3. Union dues are also an allowable deduction. Dependent Care Expense for Other Children less Dependent Care Tax Credit: If a parent pays child care expense for a child of the calculation and an “other” child, too, the tax credit may be calculated and deducted from the total child care amount. Pro-rate the net child care amount among the children according to each child’s percentage of the total. If tax returns are available, subtract the tax credit amount shown on IRS Form 2441 from the total amount of child care expense. If tax returns are not available, see example, below. For “other” children, enter one-half (50%) of the child’s net child care.

EXAMPLE: Dependent Care Tax Credit: Find the percentage on IRS Form 2441 for the amount of the parent’s annual income, such as 30% if a parent’s income is over $23,000 but not over $25,000. Multiply the percentage by the amount of child care expense paid but not more than $3,000 for one child or $6,000 for two or more children. If

the parent pays $9,000/yr for child care for three children ($4,500, or 50%, for an infant and $2,250/each, or 25%/each for the other two children after school), multiply $6,000 by .30 = $1,800. Subtract $1,800 from $9,000

for a net child care expense of $7,200. Then divide $7,200 among the three children according to each child’s percentage share of the gross child care expense. ($3,600 + $1,800 + $1,800 = $7,200)

Other: Enter the amount of any other expense which is an allowable deduction according to ARM 37.62.110 (Allowable Deductions) and 37.62.111 (Non-Allowable Deductions). Include interest paid by the parent on student loans where the child has benefitted from the parent’s education; enter from IRS Form 1098-E, Student Loan Interest Statement. Enter a parent’s qualified tuition and related expenses from IRS Form 1098-T, Tuition Statement, if parent qualifies as a student. Also, enter the annual, out-of-pocket cost (premium less subsidy) of mandatory health insurance premiums under the federal Affordable Care Act for each parent and each other child not already entered.

YOUR STANDARD OF LIVING ADJUSTMENT (SOLA) / OTHER PARENT’S STANDARD OF LIVING ADJUSTMENT (SOLA)The standard of living adjustment is a part of the child support calculation that considers each parent’s remaining income after the needs of the children have been met. The income is called “income available for the Standard of Living Adjustment” or “income available for SOLA”. Not all parents will have income available for SOLA, however. If the parent’s share of the children’s primary child support allowance (See Guidelines Table 2) plus any supplemental costs like child care or health insurance are greater than the parent’s income available for child support, there will be no income left for the standard of living adjustment (SOLA). Where there is income available for SOLA, deductions are allowed: one is specified in the rules and others may be argued as appropriate to the case.

The specified deduction is found at ARM 37.62.130 Long Distance Parenting Adjustment. The deduction is limited to the cost of transportation to exercise parenting time with the children. Annual miles driven, multiplied by the IRS business mileage rate, as well as the cost of tickets for transportation by bus, train, plane, etc. are subject to a threshold called the “standard expense” (See Guidelines Table 3). Any amount that exceeds the standard expense is deducted from the parent’s income available for the Standard of Living Adjustment.



Other standard of living adjustments may be allowed if a parent can make a convincing argument to the judge or standing master.

Following are three additional sets of instructions for income, how to count parenting days, and depreciation expense adjustments:

DISCUSSION OF INCOMEIncome for child support includes almost every type of income with the exception of some means-tested benefits, such as food stamps, public assistance (Temporary Assistance to Needy Families or TANF), and child support received for other children. “Means tested” means eligibility for benefits is determined by the amount of one’s resources (income and assets). Paragraph three (3) of ARM 37.62.105 Determination of Income for Child Support provides a list of other types of income not included for child support.

Because child support is calculated prospectively (for the future), it is frequently necessary to use the past to predict future income or employ another method to estimate it. Where a parent has worked for the same employer for many years, the most recent tax return is likely to accurately predict continuing income unless the parent is paid on commission, for example, and then an average of the past three years’ commissions is recommended.

Where a parent is working at a temporary job, however, it may not be appropriate to enter income earned from the job because it will not be available for the future. In other cases, a parent has a history of performing many different types of work: seasonal, temporary, and part-time jobs, for example. Although the parent may not continue working the particular jobs worked at the time of the calculation, the jobs are representative of the parent’s ability to remain employed and all the current job income should be entered into the calculator.

Ideally, the worksheet entries should come from the three most recent tax returns filed, as well as proof of both income and deductions, but that information is not always available. Following are some suggestions for how to determine entries for income in different situations:

A. If a parent is working for wages or salary, use current pay stubs for number of hours worked on average per week/month and multiply by hourly pay (full-time work is usually 40 hours per week X 52 weeks per year = 2,080 hours per year);

B. If a parent has more than one job, add the earnings together. If Form W-2 has been received for each job, select the highest amount from Box 1, Box 3, or Box 5 on each W-2. Then add together the number selected from each W-2 for total of wages for the year. W-2 Form boxes 3 and 5 may be higher than the amount from box 1 entered into your tax return.

C. If a parent works a seasonal job (construction, golf course work, etc.) and receives unemployment benefits during the off-season, both should be entered as income for child support; such a case may or may not be appropriate for imputing income.

D. If a parent works overtime (OT), the additional earnings are normally considered income available for child support so there is no need to separate the OT from regular time earnings, unless the parent will make an argument for not including voluntary OT in the child support calculation;

E. If a parent has multiple sources of income, such as self-employment, part-time wages, capital gains/losses, rents, and so on, each type of income should be reviewed to determine the best way to estimate it for the future. For example, if capital gains/losses are a yearly occurrence, it is likely best to average the net gains or losses for the year with the gains/losses from at least two more years in sequence (2012, 2013, and 2014, for example). Sometimes the most recent year’s amount is the best predictor of the following year’s amount; it is not necessary for all types of income to be treated the same way – averaged, for example - if a more accurate amount is the result;

F. If a parent’s tax returns show a net loss for the year or he/she has net losses for two or three years in a row, it may be best to impute income to the parent unless the parent claimed deductions not allowed for child support which can be added back to income. Depreciation is the primary business expense that



must be adjusted in determining income for child support. Straight-line depreciation is allowed but other types are not. (See Depreciation Adjustment, below.)

G. If a parent receives a large, one-time payment or series of payments – a settlement, sale of an asset, or similar transaction – the guidelines may allow for special treatment. See ARM 37.62.105(2)(a), as follows:

“….Income also includes capital gains net of capital losses. To the extent the net gains result from recurring transactions, they may be averaged over a period of at least three years. If the net gains are attributable to a single event or year, they may be used to represent income over one or more years.”

HOW TO COUNT PARENTING DAYSThe PARENTING DAYS rule, at ARM 37.62.124, provides the definition of a “day” for purposes of the child support guidelines and also the framework for counting the number of days each child spends or will spend with each parent during the year. (See Definition of a Day, below.) The number of days plays a key role in the child support calculation and must be known or estimated before an accurate calculation is possible. Essentially, the child support worksheet is completed and results in an obligation each parent owes for each child. Then, the residential arrangement in the form of the number of days each child spends with each parent is added to determine how much of each parent’s obligation is payable to the other parent. For example, if all the children in the family live primarily with their mother and do not spend in excess of 110 days per year with their father, father will owe 100% of his annual child support obligation to mother and mother will keep 100% of her child support obligation to spend directly on the children when they are in her care.

At the other end of the spectrum are families in which the children spend 50% of their time with each parent. Each child will spend 182.5 days with each parent and, after the parents’ child support obligations are determined, the 182.5 days will result in each parent’s child support being cut in half: mother will keep half of her annual child support obligation for the half year the children spend with her and will owe the other half to father for the half year they spend with him; father will keep half of his obligation and owe half to mother. When each parent owes the other, the lower amount is subtracted from the higher amount, and the difference is owed/paid by the parent with the higher obligation. For example, if father owes $500 per month to mother and mother owes $300 per month to father, the difference is $200 per month and it is owed by father because his is the higher child support obligation. As you can imagine, if the parents have equal incomes and deductions and the children all have the same expenses and spend half their time with each parent, it is possible that neither parent will owe child support. Possible, but very rare, because parents don’t normally earn equally and children frequently have differing expenses.

A third possibility is that one or more children will live primarily with mother and one or more children will live primarily with father and not spend more than 110 days per year with the other parent. In such a case, each parent will again owe child support to the other parent and the two amounts are offset (subtract lower from higher obligation) and the parent with the higher obligation will pay the difference to the other parent.

The definition of a day: For many years, administrative rules mandated that a day should be a calendar day: from midnight to midnight. In 2012, however, new language was added to the child support guidelines that allow for the parties and/or the court to determine a different time for the beginning and end of the day. If the day begins and ends at noon, for example, it will likely result in a different, and perhaps more fair, number of days for each parent in the calculation.

DEPRECIATION ADJUSTMENTDepreciation expense is the cost of a capital asset (business asset > $100) deducted from business income over the useful life of the asset. If the cost is deducted evenly over the useful life, the method is called Straight Line (SL) depreciation. For example, a delivery service buys a cargo van for $40,000 and the IRS shows it is five year property. $40,000 divided by five (5) equals $8,000 depreciation deduction for each of the five years. At the end of five years, the entire cost of the van will have been deducted from business income at the rate of $8,000 per year. Straight Line depreciation is the only method of depreciating business assets that is allowed under the



Montana child support guidelines. Because federal tax law allows a number of other depreciation methods (Declining Balance, Section 179 deduction, “special” or “bonus” depreciation, etc.), all of which recover the cost of the asset more quickly than SL, the majority of self-employed taxpayers use one of the methods that accelerates the deduction. This results in the majority of self-employed parents with depreciation deductions requiring an adjustment to comply with the child support guidelines.

NOTE: Because accelerated methods of depreciation produce higher deductions in the early depreciation years and lower deductions in the later years, not every depreciation deduction will be adjustable for child support. If the amount of Straight Line depreciation for the year is more than the amount deducted on the tax return then no adjustment should be made because it would allow depreciation expense to the owner beyond the cost of the asset. The amount of depreciation that can be adjusted depends upon where in the depreciation cycle the child support review is focused. With a seven-year asset, for example, the amount adjusted is much greater if the child support review is focused on the first three years of ownership of the asset than if the review is focused on the last three years. By the last three years, the majority of depreciation will have already been deducted and the balance will likely be less than the SL amount determined, so no adjustment will be possible.

The depreciation adjustment, if necessary, is included in one of two ways. A. The parent may figure the difference between SL allowed and the amount deducted in the tax return and include the difference as other non-taxable income. If this method is chosen, the parent must enter the business income from the tax return into the worksheet AND the income entered plus the depreciation adjustment must be greater than zero. B. The parent may figure the difference between SL and depreciation used in the tax returns and adjust the non-taxable income for the difference.

EXAMPLE #1: Tom owns and operates a tire shop as sole proprietor and reports his tire shop income and expenses on Schedule C of his Form 1040. Tom uses the 200% Declining Balance (200DB) method of depreciation for his equipment, and Straight Line (SL) depreciation for his shop building when he files his tax return. The 200DB method allows a much higher depreciation deduction than SL in the early years and much lower than SL in the later years. In 2014, Tom’s Schedule C reported an operating loss of $2,000 which included a depreciation deduction of $35,000. When the depreciation adjustment is calculated, the child support guidelines will allow $12,000 of depreciation but not the remaining $23,000 which must be added back to income for that year. Tom has the two options noted above at A and B to incorporate the disallowed depreciation for the child support calculation.

Option A requires that Tom enter $23,000 as non-taxable income and the $2,000 loss as self-employment for the child support calculation. Option B provides that Tom adjust the business loss directly by the amount of the depreciation expense not allowed and enter the new business income/loss as self-employment on the child support worksheet.


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