Case Law Update: Child Support
By Craven County o/b/o Wooten v. Hageb, Court of Appeals of North Carolina, June 1, 2021 (Child Support)
Father and mother have two children together. Father has three other minor children from previous relationships – two of those other children live with him. Mother is a W-2 employee and father is self-employed. In its findings regarding father’s income, the trial court noted that father’s business had significant expenses but failed to take those expenses into consideration in its calculation of income for child support purposes – instead, the trial court utilized father’s gross monthly business income as his income for child support purposes. Additionally, because father was only listed as the father on the birth certificate of one of the two children living with him, the trial court only gave father credit for that one child. Father appealed.
On appeal, Father argued that the trial court (1) should have considered business expenses in determining his self-employment income and (2) should have given him credit for both of the biological children who were living with him. The Court of Appeals agreed, addressing each issue as follows:
- The guidelines define income from business or self-employment as gross receipts minus ordinary and necessary expenses required for the self-employment or business. The trial court noted that it had reviewed tax returns and that father listed significant expenses on his tax returns but did not indicate how it had reached its determination of income after consideration of those things. Additionally, the trial court did not address deductibility of straight-line depreciation. The trial court’s findings are not sufficient to allow the Court of Appeals to effectively review the calculation of father’s income, so the Court of Appeals remanded for additional findings.
- The guidelines provide that a parent’s financial responsibility for his or her children who reside with them is to be deducted from his or her income when calculating support in the case at issue. Parentage may be determined in ways other than evidence of a party’s name on a birth certificate. Here, father testified that he is the biological father of the two children living with him. While the trial court may choose not to believe his testimony, the trial court needs to articulate its reason for declining to give father credit for the second child. On remand, the trial court either must give father credit for both children living with him or must state its rationale for not giving credit for both children.