While we are still testing the waters on the newish version of the Illinois Marriage and Dissolution of Marriage Act ("IMDMA"), the Illinois legislature has made another huge change. On May 31, 2016, House Bill 3892 passed both Houses of the Illinois General Assembly and was sent to the Governor for signature. HB 3892 amends Sections 505 and 510 of the IMDMA and will completely change how child support is calculated in Illinois. If signed into law by Gov. Rauner, the new provisions would be effective as of July 2017.
Illinois uses a flat rate child support formula. Under the current statute, child support is set at a percentage of the payor’s net income - the recipient’s income or earning capacity is totally irrelevant. Under the revisions, Illinois would become an income share state, joining a majority of states that already are. In other words, child support would be calculated by considering both parents’ incomes and assigning a pro rata share that each parent is responsible for. HB 3892 operates on the premise that both parents are obligated to provide support for their children, rather than just the one having less parenting time than the other.
HB 3892 requires the Department of Health and Family Services to create a child support worksheet, which will set forth a formula on which to base child support calculations going forward. The formula will consider the average expenditures associated with raising a child, the parties’ respective incomes, the division of parenting time between the parties, and other domestic support obligations a parent may have. HB 3892 also grants the court discretion to impute income to unemployed or underemployed parties. No longer will only one parent bear the financial burden for the child. While no one questions the hard work and labor invested in raising a child, it is also not fair to place the entire burden of financial support for the child on one parent’s income.
HB 3892 also changes how a party’s net income is calculated. There are two options – standardized net income and individualized net income. Most cases will utilize standardized net income, which is defined as simply a party’s gross income minus the standard tax deductions. This calculation may not mirror the actual deductions taken out of a party’s paycheck each pay period, it is based purely on standardized calculation based on a single taxpayer status. In the individualized net income approach, a party’s net income is determined by subtracting actual deductions. This method considers the actual amount of exemptions claimed by a party, a party’s filing status, actual Medicare and FICA deductions, etc. This method is used only if the parties stipulate or it is otherwise ordered by the Court. The individualized net income approach will be beneficial for business owners and those who typically claim itemized deductions on their tax returns.
With these modifications, Illinois will join with the majority of states that currently utilize an income share approach to calculate child support. HB3892 currently awaits the governor's signature. For a consultation on child support issues, contact The Nally Law Group today.