K-1-cropped-wideIn its May 11, 2016 decision in Eifert v. Eifert, the Appellate Division, Second Department, appears to discuss the interrelationship between the calculation of child support and the “income” shown on a partnership K-1 tax form. In truth, it does not.

In their divorce settlement agreement, the parties agreed that the father would pay child support consisting of two components. The first component required the father to pay $4,400 per month. As summarized by the Second Department in its opinion, the second component required the father to pay “25% of the income he derived from his ownership of stock in Eifert French & Co.”

Years later, the mother sought to recover child support arrears in the sum of $63,283.25 arising from the second component of the father’s child support obligation. The mother arrived at this sum by performing calculations based on K-1 statements received by the father from Eifert French & Co.

In opposition, the father contended that the second component of his child support obligation should be calculated based only on distribution checks he received from Eifert French & Co, rather than the income reflected on his K-1 statements. Based on that limitation, the father calculated that the correct amount of arrears he owed for this second component of his child support obligation was $21,137.49.

Supreme Court, Westchester County Justice Colleen D. Duffy agreed with the father and found arrears to be $21,137.49. The mother appealed.

Continue Reading K-1 Income and the Calculation of Child Support

When calculating a child support obligation, what effect does a simultaneous spousal maintenance award have? The November 21, 2013 decision of the Appellate Division, Third Department, in Alecca v. Alecca reveals the conflict among the Departments, questions of logic, and the need for action by the Legislature.

Agreeing with Judge Anthony McGinty, deciding for the Ulster County Supreme Court, the appellate court held in Alecca that if a spousal maintenance award does not terminate until after all children have been emancipated, the maintenance award may not be deducted from the payor’s income for child support calculation purposes. Spousal maintenance does get deducted if it terminates before all children are emancipated and the awarding court provides for a specific adjustment of child support at the time of the maintenance termination.

Child support is presumptively the function of the Child Support Standards Acct (C.S.S.A.) formula (D.R.L. §240 [1-b]; F.C.A. §413). Depending upon the number of children to be supported, the presumptive formula is a certain percentage of parental income, with the obligation of the support payor being the payor’s pro rata portion of the combined parental income of both parents. In addition to the basic child support obligation, the parents’ obligation to pay additional amounts for health and child care expenses  is also presumptively a function of the parents’ pro rata shares of their combined income. Although relevant, an add-on obligation for educational expenses (if warranted by the circumstances, justice, and the best interests of the child) is not expressly a function of pro rata shares.

Continue Reading Child Support Computations When Spousal Maintenance is Awarded

In a May 8, 2013 decision in Mejia v. Mejia, the Appellate Division, Second Department, modified a divorce judgment’s provisions concerning the cap on combined parental income, the disposition of the marital residence, college expenses for three children ages 14, 10 and 6, and judgment inconsistencies with the underlying decision and judgment  formalities.

After the parties separated, they each petitioned the Family Court for custody of the children. The parties consented that they share joint legal custody, and that the father have primary physical custody.

After a non-jury trial on certain financial issues, the Family Court considered the first $200,000 of combined parental income in determining child support, based upon, among other things, “the economic reality of life in Rockland County,” and a determination that the gross income of the mother was substantially less than that of the father. The mother’s pro rata share of the basic child support obligation was 37% of 29% of the first $200,00 of combined parent income was fixed at $1,789 per month in the 2011 Family Court order.

The marital residence, titled in the parties’ joint names, was awarded to the father and the children, based upon the father’s claim that there was no equity in the house. The court further concluded in its decision that the father should maintain health insurance for the children, and that the mother should pay 37% of the college expenses of the children.

The Second Department lowered to $150,000 the applied cap on combined parental income, “considering the substantial difference between the parties’ income, the fact that the [mother] has less income than the [father], and the amount of parenting time awarded to the [mother].” Calculated on that basis, the mother’s pro rata share of the child support obligation was $1,341 per month.

Continue Reading The Second Department Rules on Child Support Parental Income Cap, Transfer of the Marital Residence, and Judgment Formalities