This bill amends the definition of "adjusted gross income" in relation to child support guidelines by introducing additional deductions that can be subtracted when calculating an obligor's income. Specifically, it retains existing deductions such as court-ordered support payments, mandatory retirement contributions, and actual state income taxes paid. Notably, it adds provisions for self-employed obligors, allowing them to deduct 50 percent of their actual self-employment taxes paid. Furthermore, for employee obligors, the bill allows for the deduction of 100 percent of the federal Old-Age, Survivors, and Disability Insurance Social Security program and Medicare taxes withheld from their pay.

The bill also makes a minor deletion, changing the wording from "Fifty percent of the actual self-employment tax paid" to "If a self-employed obligor, 50 percent of the actual self-employment taxes paid." The effective date for these changes is set for January 1, 2027. Overall, the bill aims to provide a more equitable calculation of adjusted gross income for child support obligations by recognizing the tax burdens faced by both self-employed and employee obligors.

Statutes affected:
Introduced: 458-C:2
As Amended by the House: 458-C:2
HB1225 text: 458-C:2