Most states look to the parents’ net income, although some states use the parents’ gross income.
Gross income means the parents’ income from all sources, including wages and investments, with no deductions for taxes or other expenses. Non-wage benefits a parent receives from an employer might be counted as income. For example, military housing allowances usually are counted as income when determining child support. Use of a company car for personal business also might be counted as income.
Net income means gross income minus federal and state income taxes, Social Security tax, Medicare tax, and health insurance. Some states will allow other deductions, such as mandatory retirement contributions, obligations of support to other families (other than the family whose support is currently at issue), and payment on debts that were incurred during the marriage for the benefit of the family.
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