Posts Tagged ‘child support’
Sunday, March 29th, 2009
I read New York Times article today that closely parallels my experience over the past few months. As the economy continues to deteriorate and jobs are lost through no fault of the party paying child support, the Family Court has seen a significant increase in petitions seeling downward modification of child support. While the article discusses how the cases are handled in New York City, as opposed to Rochester and nearby counties where I practice, I see a lot of similar issues in our local Family Courts.
I have previously discussed issues related to the contents of a Family Court petition seeking a modification of child support obligation. I should note that downward modification of child support due to a loss of employment is never guaranteed, and anyone seeking downward modification should use assistance of an experienced child support lawyer. I am planning to write a more detailed post on downward modification of child support in the near future.
Tags: attorney, child support, downward, Family Court, Family Court Act, Family Law, lawyer, loss of employment, modification, new york, reduction, rochester
Posted in child support, child support enforcement, Child Support Standards Act, court orders, Domestic Relations Law, Failure to Pay Child Support, Family Court, Family Law, imputed income, modification, New York Law, procedure, Supreme Court | No Comments »
Monday, March 16th, 2009
In general, the Child Support Standards Act includes all of the parties’ income for child support calculations, subject to appropriate child support limits and deductions. What happens in the situation when a party is receiving a tax refund for teh taxes paid during the previous year? In Shelby T. v. Michael L., 2009 NY Slip Op 29075 (Fam. Ct. Clinton Co. 2009), Judge Lawliss overturned the support magistrate’s decision which included the tax refund as income in the child support calculation. The court held that since the party obligated to pay child support receives a tax refund on the taxes paid in 2008, in 2009, if the court were to include the tax refund in the child support calculation, then the money earned, and taxed, in 2008, would count as income for child support purposes once again in 2009. Clearly, that was not the result contemplated by the Child Support Standards Act.
If engaged in child support litigation, a lawyer must make sure that his client’s income is counted only once and that the client receives all applicable deductions and variances.
Tags: alex korotkin, attorney, child support, Child Support Standards Act, divorce, Domestic Relations Law, Family Court, Family Law, lawyer, new york, rochester, Supreme Court, taxes
Posted in child support, child support enforcement, Child Support Standards Act, court orders, divorce, Domestic Relations Law, Family Court, Family Law, New York Law, procedure, Supreme Court, taxes | No Comments »
Monday, March 9th, 2009
Periodically, I am asked about situations where an overpayment of child support has taken place. Most of the time in those situations, I, as a lawyer, have to deliver to the client the unpleasant news that the amount overpaid cannot be recovered. This is true whether the child support was being paid pusuant to a judgment of divorce, separation agreement, or an order of Family Court. With respect to child support, there is a strong public policy against restitution or recoupment of any overpayment. See Katz v. Katz, 55 A.D.3d 680 (2nd Dept. 2008). The strong public policy considerations as decided by the New York courts, prevent recoupment or refund of child support paid. However, a parent may be entitled to a credit, enabling him or her to re-coup the overpayment of the child support payments against his/her share of the statutory add-on expenses – the portion of child support intended to cover child care and a child’s educational and special needs. See Coull v. Rottman, 35 AD3d 198 (1st Dept. 2007).
There are also certain limited circumstances in which a refund of child support may take place. For example, a refund may be directed when there was a mathematical error in the calculation of the amount of support (Colicci v. Ruhm, 20 AD3d 891 (4th Dept. 2005); when the support amount in the final order of support is less than in the temporary award (Maksimyadis v. Maksimyadis, 275 AD2d 459 (1st Dept. 2000)); or when it is shown that the subject child is not the biological child of the payor and there is no finding of estoppel (Thomas v. Commissioner of Social Services, 287 AD2d 642 (2nd Dept. 2001). There may be another category of cases where a refund of child support may be ordered. In Spencer v. Spencer, previously discussed on this blog, the Court of Appeals hinted that the recoupment may be available where it is ultimately determined that New York court lacked jurisdiction to order payment of child support.
If you are in a situation where you believe that child support was or is being overpaid, speak with an experienced family law attorney and find out what your options are and what can done in your particular case.
Tags: attorney, child support, credit, cseu, divorce, domestic relation law, Family Court, Family Law, lawyer, new york, overpayment, recoupment, rochester
Posted in child support, child support enforcement, Child Support Standards Act, court orders, divorce, Domestic Relations Law, Failure to Pay Child Support, Family Court, Family Law, modification, New York Law, procedure, Settlement Agreements, Stipulations, Supreme Court, UIFSA | No Comments »
Wednesday, March 4th, 2009
On occasion, a divorce may result in one or both of the parties filing for bankruptcy, often without an adequate understanding of the limited relief available in the bankruptcy court. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) directly addressed issues related to the dischargeability of marital debt and support obligations, as well as to the effect of the automatic stay on collection and enforcement proceedings out of divorce and family law litigation.
Under bankruptcy law, a “domestic support obligation” is any debt incurred before or after a bankruptcy filing that is owed to or recoverable by a spouse, former spouse, child or governmental unit; in the nature of alimony, maintenance or support; and established pursuant to the terms of a divorce decree, separation agreement, property settlement agreement, court order or administrative determination.
In Chapter 7 bankruptcy, essentially all marital and domestic relations obligations are not dischargeable, regardless of whether they are support in nature, property divisions or “hold harmless” agreements, provided they were incurred by the debtor in the course of a matrimonial proceeding or a divorce action which resulted in a separation agreement, divorce decree, court order or administrative determination.
A debtor’s obligation to pay marital debts directly to a third party ( ie., pay the mortgage on former marital residence) and to hold the former spouse harmless on said debts is also deemed to be non-dischargeable if the obligation has the effect of providing support to the former spouse. A debtor’s duty to pay the following expenses are usually deemed to be in the nature of support and not dischargeable: educational expenses of a minor child; medical insurance coverage for a minor child; and life insurance, with the minor children as beneficiaries.
Attorney’s fees owed by debtor to his own lawyer are clearly dischargeable in bankruptcy, but as a general rule, attorney’s fees owed by debtor to a former spouse’s attorney are not dischargeable, if the underlying legal proceeding resulted in the entry of an order or judgment directing payment of maintenance or spousal support to the former spouse.
The division of a debtor’s pension benefits during the divorce action is usually accomplished by entering a Qualified Domestic Relations Order (“QDRO”). Since division of a pension is considered to be a transfer by debtor of a present interest in his pension, and as such, it is not a debt that can be discharged in bankruptcy.
In Chapter 13 bankruptcy, past due domestic support obligations owed by a debtor are not dischargeable, unless they are paid in full over the life of the Chapter 13 plan. However, if a debt created by a separation agreement or judgment of divorce is not in the nature of support, it sometimes can be discharged in Chapter 13 without being paid in full.
For a Chapter 13 Plan to be confirmed by the Bankruptcy Court, it must: pay in full to the former spouse all domestic support obligations owed by debtor at the time of the bankruptcy filing, and the debtor must be current on all domestic support obligations incurred after the bankruptcy filing.
A Chapter 13 Plan, even if confirmed by the bankruptcy court, is subject to dismissal if the debtor fails to pay any post-petition or post-confirmation domestic support obligations, and a Chapter 13 discharge will not be entered by the bankruptcy court unless and until a debtor certifies that all domestic support obligations have been paid and that the debtor is current on such obligations.
The automatic stay created by a bankruptcy filing bars the commencement or continuation of most legal proceedings, but it has no effect on a proceeding to establish paternity; to establish or modify a child support order, determine child custody or visitation issues, or dissolve a marriage, except to the extent that such proceeding may seek to determine a division of marital property in which the bankruptcy estate also has an interest. In those situations, the divorce can be granted without first obtaining relief from the automatic stay, but the marital property cannot be divided without obtaining such relief.
The automatic stay also does not prevent the post-petition collection of domestic support obligations such as alimony or child support from any property belonging to the debtor, providing that the bankruptcy estate does not also have an interest in the same property; from automatic wage deduction orders created by a statute or judicial or administrative order; from the interception of debtor’s federal or state income tax refunds, or
from the withholding, suspension or restriction of a debtor’s driver’s license or professional or occupational license. Therefore, Bankruptcy Court does not offer much protection for someone seeking to avoid the domestic support obligations.
The above rules will apply to the proceedings in New York State courts. In Ross v. Sperow, 57 A.D.3d 1255 (3rd Dept. 2008), the Appellate Division had to address a situation where one of the parties was seeking to enforce a counsel fee award after the other party filed for bankruptcy. In Ross, multiple violation petitions had been filed by the parties over the course of several years. In August 2006, Family Court upheld mother’s motion for counsel fees and directed father to pay $5,000 of the mother’s counsel fees. Father filed for a Chapter 7 bankruptcy thereafter, and listed the award of counsel fees as an unsecured debt. Father’s bankruptcy was discharged in January 2007. Mother brought a violation petition which alleged that father failed to pay the counsel fees. Father moved to dismiss petition on ground that he discharged counsel fee award in bankruptcy. The Appellate Division stated that state and federal courts have concurrent jurisdiction over issue of dischargabilityof a particular debt and held that domestic support obligations in the nature of support are exempt from discharge in bankruptcy. While father contended that counsel fees incurred were for custody and visitation proceeding, the record reveals that mother’s initial petition commencing the proceeding raised issues of financial need and hardship. According to the Appellate Division, term “in the nature of support” is broadly interpreted in the context of discharge of debt obligations in bankruptcy and held that the award of counsel fees was in part in the nature of support, and as such, exempt from discharge in bankruptcy.
Tags: alimony, attorney, Bankruptcy, child support, discharge, divorce, domestic relation law, domestic support obligation, equitable distribution, Family Law, lawyer, maintenance, new york, rochester, Supreme Court
Posted in attorneys fees, Bankruptcy, child support, child support enforcement, court orders, divorce, Domestic Relations Law, drafting, equitable distribution, Family Law, federal law, maintenance, New York Law, procedure, Settlement Agreements, Stipulations, Supreme Court | 1 Comment »
Monday, February 16th, 2009
Prior to the enactment of the Child Support Standards Act, contained in Family Court Act §413 and Domestic Relations Law §240, the courts had held that the provision of a college education to one’s minor children was not a necessary expense for which a parent could be obligated in the absence of a voluntary agreement or special circumstances. Haessly v. Haessly, 203 A.D.2d 700 (3d Dept. 1994). However, recent case law recognized that special circumstances, which involve the educational background of the parents, the child’s academic ability, and the parents’ financial ability to provide the necessary funds, continue to be relevant factors in applying the standard set forth by the Legislature in the Child Support Standards Act for determining whether an award for college expenses is appropriate.
It is clear that the Court has the power to order a parent to pay his child’s educational costs even though the parties’ settlement agreement is silent on that issue. Manocchio v. Manocchio, 16 A.D.3d 1126 (4th Dept. 2005); McDonald v. McDonald, 262 A.D.2d 1028 (4th Dept. 1999). As aptly noted in Mrowka v. Mrowka, 260 A.D.2d 613, 613 (2d Dept. 1999), “Although the parties’ stipulation of settlement was silent as to the costs of college, this does not necessarily mean that an agreement was reached pursuant to which college costs would not constitute a component of the parties’ obligation to pay child support.”
According to the Appellate Division, Fourth Department, Fruchter v. Fruchter, 288 A.D.2d 942, 943 (4th Dept. 2001), the Child Support Standards Act authorizes an award of educational expenses where warranted by the best interests of the children and as justice requires, upon a showing of “special circumstances”. Relevant factors include the educational background of the parents, the child’s scholastic ability, and the parents’ ability to provide the necessary funds. Id.
In Manocchio v. Manocchio, 16 A.D.3d 1126 (4th Dept. 2005), the Appellate Division, the Fourth Department, rejected the father’s contention that Family Court improperly denied his objection to an order requiring him to pay half of his daughter’s educational expenses. The Fourth Department held that the support magistrate properly determined that the petitioner-mother was unable to meet the child’s educational needs on the income and support that she was receiving, and that the respondent-father had the ability to pay support. Id.
Therefore, even if the parties have a separation agreement that is silent on the issue of paying for college, they may be directed to pay for their child’s college education by the court.
Tags: best interests of child, child support, college expenses, divorce, Domestic Relations Law, Family Court, Family Law, lawyer, new york, New York Law, rochester, Supreme Court
Posted in best interests of the child, child support, child support enforcement, college expenses, court orders, divorce, Domestic Relations Law, drafting, Family Court, Family Law, modification, New York Law, Settlement Agreements, Supreme Court | No Comments »
Monday, January 26th, 2009
I am asked occasionally whether a parent’s child support obligation can be terminated on the grounds that the child stopped all contact with the parent in order to avoid parental control. My usual response is that it can be done, but the parent must establish either abandonment or constructive emancipation, and faces a substantial burden of proof.
The Family Court Act §413 mandates that parents support their children until they reach the age of 21. The courts in New York have held that a child’s right to support and the parent’s right to custody and services are reciprocal, and that a parent may impose reasonable regulations. Generally, where a minor of employable age and in full possession of her faculties, voluntarily and without cause, abandons the parent’s home, against the will of the parent and for the purpose of avoiding parental control, the child forfeits his/her right to demand support. Roe v. Doe, 29 N.Y.2d 188 (1971); Matter of Ontario County Department of Social Services (Christopher L.) v. Gail K., 269 A.D.2d 847 (4th Dept. 2000), leave denied, 95 N.Y.2d 760 (2000).
While the duty to support is a continuing one, the child’s right to support and the parent’s right to custody and services are reciprocal. Roe v. Doe, 29 N.Y.2d 188 (1971). Thus, a parent, in return for maintenance and support, may establish and impose reasonable regulations for his/her child. In Roe v. Doe, supra, the Court of Appeals explained:
Accordingly, though the question is novel in this State, it has been held, in circumstances such as here, that where by no fault on the parent’s part, a child “voluntarily abandons the parent’s home for the purpose of seeking its fortune in the world or to avoid parental discipline and restraint [the child] forfeits the claim to support” . . . To hold otherwise would allow, at least in the case before us, a minor of employable age to deliberately flout the legitimate mandates of her father while requiring that the latter support her in her decision to place herself beyond his effective control.
The doctrine of constructive emancipation is applicable to the non-custodial parent where the child unreasonably refuses all contact and visitation. Matter of Commissioner of Social Services (Jones) v. Jones-Gamble, 227 A.D.2d 618 (2nd Dept. 1996). In that case, the court held that the evidence clearly established that the child wanted no relationship with her father. Despite the father’s prior support payments, there was essentially no parent-child relationship between them. The appellate court held that, to require the father to provide reimbursement for the support of a daughter who had renounced and abandoned him would have clearly resulted in an injustice under the facts of that case.
In the Fourth Department case, Perez v. Perez, 239 A.D.2d 868 (4th Dept. 1997), appeal dismissed, 91 N.Y.2d 956 (1998), the record established that the parties’ 18 year old daughter had refused to visit with the father or to have any relationship with him. That child was found to be a minor of employable age and in full possession of her faculties, who had voluntarily refused to have a relationship with plaintiff. The child thereby forfeited her right to support from her father. Accordingly, the Fourth Department rejected the mother’s contention that the lower court erred in modifying the parties’ divorce decree by suspending father’s obligation to pay child support for the parties’ child until further order of the court.
Children of employable age and in full possession of their faculties who voluntarily and without cause abandon their home, against the will of their parents and for the purpose of avoiding parental control, forfeit their right to demand support, even if they are not financially self-sufficient. Guevara v. Ubillus, 47 A.D.3d 715 (2nd Dept. 2008). In that case, petition for child support was denied where the petitioner, without good cause, abandoned the mother’s home on her 18th birthday in order to avoid parental control and to gain independence from her mother’s restrictive household rules; the petitioner was found to have abandoned her mother’s home against the mother’s will and without cause.
In Rubino v. Morgan, 224 A.D.2d 903 (3d Dept. 1996), the Appellate Division held that the lower correct properly terminated the father’s support obligation on the grounds that his daughter’s refusal to visit with him and the child’s unprovoked rejection of him constituted abandonment. The Third Department noted that at the time of the hearing, the daughter was 17 years old, and she had refused to visit with the father since she was 14 years old. Even after the daughter refused to visit with her father, he continued for years to send letters and cards to her. The letters were never answered. He also attempted to talk with the child, without success. His actions and requests were not arbitrary, and there was no evidence of malfeasance, misconduct or neglect. The Appellate Division upheld the lower court’s findings that the daughter chose to permanently breach her relationship with the father, notwithstanding her generalized claim of “emotional abuse”, and that the father did not contribute significantly to his daughter’s decision to distance herself from him.
Furthermore, where it can be established by the non-custodial parent that the custodial parent has unjustifiably frustrated the non-custodial parent’s right of reasonable access, child support payments may be suspended. Usack v. Usack, 17 A.D.3d 736 (3d Dept. 2005). In that case, the father had encouraged the children’s unbridled enmity toward, and total exclusion of, their mother through a course of conduct calculated to inflict the most grievous emotional injury upon her. The Appellate Division held that mother’s child support obligation should have been suspended due to the father’s deliberate actions in alienating the parties’ children from her.
Tags: abandonment, child support, child support guidelines, Child Support Standards Act, constructive emancipation, emancipation, Family Law, new york, Supreme Court
Posted in child support, child support enforcement, Child Support Standards Act, Domestic Relations Law, emancipation, Failure to Pay Child Support, Family Court, Family Law, modification, New York Law, Supreme Court, visitation | 1 Comment »
Monday, January 5th, 2009
If at the conclusion of the divorce action a party is to receive a stream of payments to pay that party’s equitable distribution award, does that money need to be included in the child support calculations? In Holterman v. Holterman, 3 N.Y.3d 1 (2004), the husband argued that the payment of $21,288 per year, the annual installment payment of wife’s distributive award of her share of enhanced earnings from his medical license, should be deducted from the computation of his income in determining his child support obligation under the CSSA and, concomitantly, that amount should be included as income attributable to wife. He claimed that the failure of the lower courts below to perform such reassignment of income results in “double dipping” from the same income stream–i.e., awarding both child support and equitable distribution of his future enhanced earnings from the same income source, his salary as a physician. Court of Appeals disagreed with the husband and held that his proposed reallocation formula, or any formula that required a deduction of a distributive award paid over a period of years from the licensed spouse’s income for purposes of calculating child support, is impermissible under the CSSA. The Court ruled that the CSSA does not provide for the deduction of distributive awards from income, whether based on enhanced earning capacity due to a professional license or otherwise. Nor does the CSSA authorize the inclusion of a distributive award as income to the parent receiving the award. This lack of inclusion in either the list of permissible statutory deductions or the definition of income is understandable because distributive awards “reflect, not income, but a property distribution” of the marital assets, regardless of whether such assets are being paid as an income stream.
Tags: child support, child support guidelines, Child Support Standards Act, equitable distribution, Family Law, new york, Supreme Court
Posted in child support, Child Support Standards Act, court orders, divorce, Domestic Relations Law, equitable distribution, Family Law, Supreme Court | No Comments »
Monday, December 29th, 2008
If parties choose to deviate from the provisions of the Child Support Standards Act with respect to the child support paid, such deviation will be upheld by the court provided the parties complied with such formalities as including calculations of the presumptive child support amount and the reasons for deviating from the CSSA. However, the parties frequently choose not only to deviate from the child support amount calculations, and add-ons such as child care and health care costs, but also to make recalculations of child support an annual or semi-annual event, or to include other items not included within the scope of the CSSA.
In Fasano v. Fasano, 43 A.D.3d 988 (2nd Dept. 2007), the parties included an annual cost-of-living-adjustment (“COLA”), with respect to the child support paid by the non-custodial parent. The Second Department found that the parties to the agreement did not opt out of the CSSA standards with respect to basic child support, but that the COLA provision included in the agreement represented potential future deviations from the CSSA basic child support obligation. The agreement did not state the reasons for including the COLA provisions. The Appellate Division held that the COLA provision represented an opt-out from the CSSA and was directly related to the child support. Since the reasons for including the COLA provision were not included in the agreement, the opt-out was invalid. The court vacated the COLA provision, while the basic child support provision of the agreement was not vacated.
However, not all provisions dealing with financial support of the children are considered to be within the scope of the CSSA. In Cimons v. Cimons, 53 A.D.3d 125 (2nd Dept. 2008), the Second Department held that the obligation to provide for the future college expenses of the children was not part of the parties’ basic child support obligation and therefore was not subject to the CSSA requirement that any deviation from statutorily-mandated child support obligations must be recited and explained in a stipulation of settlement. While the parties’ agreement regarding basic child support violated the CSSA by failing to recite and explain the reasons for the deviation, the provision concerning future college expenses was enforceable. The court held that unlike the basic obligation to provide child support, payment for a child’s college education is not mandatory. Absent a voluntary agreement, a parent might be required to provide support for his or her child’s attendance at college, but the determination of that obligation is dependent upon the exercise of the court’s discretion in accordance with Domestic Relations Law §240(1- b)(c)(7). The court further noted that the determination as to which additional aspects, if any, of the parties’ stipulation must be vacated along with the basic child support provision depends on the circumstances of the particular case and the nature of the obligations addressed in the other provisions of a stipulation. Some provisions may be so directly connected or intertwined with the basic child support obligation that they necessarily must be recalculated along with the basic support obligation. It found that unlike child care expenses and unreimbursed health care expenses, education expenses were not directly connected to the basic child support calculation and did not require the appropriate opt-out language.
The above cases represent the dangers involved any time the parties attempt to either opt-out from the CSSA or attempt to include items outside of the scope of the CSSA in their agreement. Any such agreement must be carefully drafted to make sure that it is not subsequently challenged and invalidated.
Tags: child support, child support guidelines, Child Support Standards Act, cola, college expenses, Family Law, modification, new york, opt-out, Supreme Court
Posted in child support, child support enforcement, Child Support Standards Act, college expenses, court orders, divorce, drafting, Family Law, modification, New York Law, procedure, Settlement Agreements, Stipulations, Supreme Court | No Comments »
Sunday, December 21st, 2008
As we come to the end of the year, I am often asked about different tax issues applicable to my clients’ situations.
If my client’s divorce will not become final before the end of the year, the parties can still file a joint tax return. Once the judgment of divorce has been filed, an ex-spouse can file the return as a head of household, if he or she has paid for over half the maintenance of the household, and has a dependent living at his or her home for over half the year.
When the parties are divorced, only one of them can claim the $3,500 child dependency exemption on their tax returns for 2008. The parent claiming the dependency exemption is also allowed a $1,000-per-child tax credit for children younger than 17, as long as his or her income is not above the following cut-offs. For a married couple filing jointly, it is $110,000, for a married couple filing separately, it is $55,000 per spouse, and for all others, it is $75,000. If the applicable income exceeds the above thresholds, the amount of the child tax credit is reduced proportionately.
Usually, it is the person named as the custodial parent in the child custody portion of the divorce decree that is allowed to claim the child as a dependent. If the divorce decree does not name a custodial parent, then the parent with whom the child has lived with the longest throughout the year is the custodial parent.
A non-custodial parent, however, can claim the child dependency exemption, as long as the custodial parent signs a waiver promising not to claim the exemption. This is typically accomplished by the use of IRS Form 8332. However, the recent amendments of the IRS regulations dealing with this issue have complicated this issue. The final regulations provide that a release not on a Form 8332 must be a document executed for the sole purpose of releasing the claim. A court order or decree or a separation agreement cannot serve as the written declaration. If a release of a claim to a child is for more than one year, the noncustodial parent must attach a copy of the written declaration to the parent’s return for the first tax year for which the release is effective. Copies must also be attached to returns for later years. Under the final regulations, a custodial parent who released the right to claim a child, can revoke the release for future tax years by providing written notice of the revocation to the other parent. The final regulations require that the parent revoking the release notify, or make reasonable attempts to notify, in writing, the other parent of the revocation. What is a reasonable attempt is determined under the facts and circumstances, but mailing a copy of the written revocation to the noncustodial parent at the last known address or at an address reasonably calculated to ensure receipt satisfies this requirement. A revocation can be made on Form 8332, or successor form designated by IRS. A revocation not on the designated form must conform to the substance of the form, and be in a document executed for the sole purpose of revoking a release. A taxpayer revoking a release may attach a copy rather than an original to the taxpayer’s return for the first tax year the revocation is effective, as well as for later years.
Yet another related issue is who can claim the child as dependent under the group health plan coverage and health savings account (“HSA”) distributions. Under the final regulations, for purposes of group health plan coverage and health savings account (HSA) distributions, both parents can claim the child as a dependent if: (1) the child qualifies as a dependent of one of the parents; (2) the parents (both parents together) provide more than ½ of the child’s support for the calendar year; (3) the child is in the custody of one or both parents for more than ½ of the calendar year; and
(4) the parents are divorced, legally separated under a decree of separate maintenance, separated under a written separation agreement, or live apart at all times during the last six (6) months of the calendar year.
If a non-custodial parent claims the child exemption first, and without the custodial parent’s permission, he or she is likely to receive the exemption temporarily. However, once the custodial parent files his or her tax return including the exemption, and IRS notices that a child’s social security number has been included on two different tax returns, then both parties would be notified by IRS that only one party is entitled to the exemption, and the tie-breaker rule would be used to resolve this situation. This rule says that if two parents claim that a child as a dependent, the parent with whom that the child lived with the longest during the year, receives the exemption. If the child had spent the same amount of time with both parents, then the parent that had the higher adjusted gross income would get the exemption. The parent who was not entitled to the exemption would have to repay the tax, plus penalties and interest.
Regardless of who the custodial parent is, if the non-custodial parent pays for any of the child’s medical bills, these costs can be a deduction, subject to appropriate income limits. Child-care credit for work-related expenses can be claimed for children younger than 13.
The spouse who pays maintenance or spousal support can also receive a tax deduction for these payments, even if they aren’t itemized—as long as the payment amounts are stated in the divorce agreement or the judgment of divorce, and actually paid. The spouse who receives maintenance must pay taxes on it. For child support, however, there is no deduction for paying it and no taxes are paid by the parent receiving it. Assets transferred from one spouse to another during a divorce are not generally taxed.
Please note that the above discussion is not a tax advice and these issues should be discussed with your tax professional.
Tags: child support, divorce, Domestic Relations Law, equitable distribution, Family Law, maintenance, new york, New York Law, rochester, Supreme Court, taxes
Posted in child support, court orders, custody, divorce, Domestic Relations Law, drafting, equitable distribution, Family Law, federal law, maintenance, New York Law, Settlement Agreements, Stipulations, Supreme Court, taxes | No Comments »
Sunday, November 30th, 2008
When your ex-spouse files for bankruptcy, all efforts to collect any debts have to stop unless they fit within one of the exceptions in the bankruptcy statute. This is known as the “automatic stay.” One exception to the automatic stay is the one that allows the commencement or continuation of a proceeding to establish or modify a support award or collect support from property that is not property of the bankruptcy estate. 11 U.S.C. 362(b)(2).
Current support debts survive a bankruptcy without the need for you to have to go to bankruptcy court. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, among the changes in creditor priority is that unpaid child support and alimony has priority over any other creditor, including taxes owed. If you are owed back support it is very important that you file a “proof of claim” with the bankruptcy court to receive payment.
The bankruptcy law requires the trustee in bankruptcy, if there is a claim for a domestic support obligation in a case, to provide written notice to the party to whom the domestic support obligation is owed, and to the state’s Child Support Enforcement Agency. A notice at the time of filing and a second notice at the time of discharge are required. In the notice to the creditor, the trustee must provide contact information for your state’s Child Support Enforcement Agency.
The new bankruptcy law made non-support obligations from a divorce or separation non-dischargeable in a chapter 7 bankruptcy, if the discharge of the obligation would harm the spouse to whom the obligation is owed more than it would harm the person who owes it, your ex-spouse. 11 U.S.C. 523(a)(15). A debt that is non-dischargeable means that your ex-spouse is still responsible for it. You would need to file a complaint in bankruptcy court to get the property settlement debt excepted from discharge. If you don’t file a claim with the bankruptcy court, the debt may be wiped out and you won’t be able to collect it later.
The discharge in a chapter 13 case is somewhat broader than in a chapter 7 case. Debts dischargeable in a chapter 13, but not in chapter 7, include debts arising from property settlements in divorce or separation proceedings.
How do bankruptcy courts decide what’s a support obligation and what’s a property settlement? The courts have based their decisions on such questions as:
Does the obligation terminate or reduce with the occurrence of certain events, like remarriage or a child turning 18?
Is the obligation in installments or a lump sum?
Are there minor children?
What is the relative health and education of the parties?
Was there a need for support at the time of the divorce?
The way in which the judgment of divorce is drafted can reduce the chance that the bankruptcy court will discharge the debt. The likelihood that the debt will not be discharged by labeling the debt payments as either support or alimony in the decree.
If you’re listed as a creditor on your ex-spouse’s bankruptcy petition, you should receive notice from the bankruptcy court of the filing and information about the date and time of the first meeting of creditors (known as a “341 meeting”). You should also receive information on the deadline for filing a claim and a proof of claim form for filling out.
Tags: Bankruptcy, child support, divorce, Domestic Relations Law, equitable distribution, Family Law, maintenance, new york, New York Law, rochester, Supreme Court
Posted in Bankruptcy, child support, child support enforcement, court orders, divorce, Domestic Relations Law, drafting, equitable distribution, Family Court, Family Law, maintenance, New York Law, procedure, Supreme Court | No Comments »
