The common and legal terms used to refer to various types of support can cause confusion. Simply put, Wisconsin law recognizes three types of support payments: child support, family support or maintenance. It is also possible to agree to section 71 payments, a creation of the internal revenue code, which the court can order if the parties have stipulated to them, but the court cannot order them unless the parties have stipulated to them. You should discuss section 71 payments with your attorney before making a decision.
To add to the confusion, these terms are referred to by other names on various documents used in a divorce proceeding, from the child support enforcement agency, and in court orders, as well as in conversation. The most important aspect of these terms is their tax advantages.
Under the laws of the state of Wisconsin, parents owe a duty to support their children (child support), and in some instances, owe a duty to support his or her former spouse (maintenance) or both (family support). While Wisconsin law provides for three types of support: child support, family support and maintenance, the IRS refers to maintenance as alimony.
Family Support
Family support is a combination of maintenance and child support.
At one time, family support was structured, so the payor of family support could deduct the full amount of support paid from his or her income tax return, and the payee added the amount to his or her income. Recent case law in the tax appeals court has rendered family support as a vehicle for tax planning for the family less certain.
For information about establishing a family support order, please refer to family support. For information about enforcing a support order that already has been ordered by a court, refer to post judgment enforcement of maintenance orders.
Maintenance
Maintenance can be ordered if the couple was previously married, the court has personal jurisdiction over the payor, and after consideration of certain factors set forth in the statutes.
Maintenance may be fully deducted by the payor and fully included by the payee on their respective income tax returns.
Also refer to maintenance for information about establishing an order, or post judgment enforcement for information about enforcing a previously entered order.
[More about Maintenance] [More about Post Judgment Enforcement]
Child Support
Child support is paid when a child is born to or adopted by a couple and when a child support order is filed. Child support can be ordered even if the couple is not married.
In a paternity action, child support and the birth expenses (hospital, doctor, room, post-birth medical care) can be charged to the payor retroactively to the date of the birth of a child if certain factors are present. This can result in a substantial arrearage that can affect tax refunds (through intercept programs) and the right to get or use a passport. Otherwise, child support orders are not made for the period of time prior to the filing and service of a motion to modify child support.
Child support is never includible to the payee's income or deductible to the payor.
Child support provides information about establishing a child support order and how the amount is calculated. Post judgment enforcement provides information about enforcing a previous child support order.
As of October 1, 2008, child support payees will pay a $25.00 (twenty-five dollar) annual administrative fee deducted from support paid after they receive $500.00 (five-hundred dollars) in support for the fiscal year (October 30 thru September 30). It will be in addition to the payor's $65.00 (sixty-five dollars). It will not be charged to families who are receiving W-2 cash payments, Kinship Care benefits, Caretaker Supplement (CTS) benefits or Aid to Families with Dependent Children.
As of December 1, 2008, and as a result of the creation of the Department of Children and Families (DCF) and the renaming of the Department of Health Services, there are several Wisconsin administrative rules that will have their codes and numbers changed effective December 1, 2008. The section that is of most concern to parties with minor children are:
DWD 40 Child Support Percentage of Income Standard will be DCF 150.
DWD 41 Establish Paternity for a Nonmarital Child will be DCF 151.
[More about Child Support] [More about Post Judgment Enforcement]
Tax Advantages
The Internal Revenue Code references alimony. Maintenance is alimony for purposes of the IRS. Maintenance can be used as a tax device to keep more marital dollars available to the family as a whole.
Call Attorney Kathleen Reiley (608-246-8309) or send Kathleen Reiley an email.
