Childcare Expenses Paid By Non-Custodial Parent
In an earlier article (“Child Support — Some Virginia Basics“), we gave some general information about child support calculations and some of the basic inputs including work-related childcare expenses.
Recently, we received a very specific question about the calculation from a VaSupportCalc user who was using the “Sole” Support Calculator. The user asked: “Why doesn’t the payment of work-related childcare costs get credited to the non-custodial parent the same way that health insurance premiums get credited when paid by the non-custodial parent?”
We thought that the answer to this great question should be shared with our millions of readers (ok, with both of you).
Background: What the Statute Says
The statute that spells out how to do the child support guideline calculation (Va. Code §20-108.2) includes directions on how to take work-related childcare expenses into account. “Any child-care costs incurred on behalf of the child or children due to employment of the custodial parent shall be added to the basic child support obligation.” This is the same guidance given regardless of which of the three calculators (“Sole,” “Shared,” or “Split”) is used.
But here’s the problem. The statute doesn’t say if it matters WHICH parent is making the childcare payments. Who makes the payment doesn’t matter for either of the other two calculators (“Shared” or “Split”), but it can make a big difference when you use the “Sole” calculator. Suppose that both parents are using the same childcare provider and are both contributing toward the costs. What happens if the non-custodial parent’s payments are included in the childcare costs? You end up with an illogical result that is strikingly unfair to the non-custodial parent.
So What’s the Problem?
Mathematically, here’s what happens: if the amounts paid by the non-custodial parent are included in the total support obligation, the non-custodial parent not only paid the childcare provider but then is also required to pay a higher child support obligation due to the increased cost of childcare. Because of the way the statute treats the payments by the non-custodial parent, the non-custodial parent has a strong disincentive to pay any work-related childcare costs!
As a point of comparison, the statute is much more sensible when it comes to health insurance costs. The marginal costs for providing health, dental, and vision insurance for the children is part of the guideline calculation BUT the statute explicitly gives a credit to the non-custodial parent if that parent (or his or her spouse) pays for the children’s insurance: “…the monthly obligation of the noncustodial parent shall be reduced by the cost for health care coverage…when paid directly by the noncustodial parent or that parent’s spouse.”
As we frequently say in these posts, nothing that we say should ever be considered legal advice or a substitute for talking with your lawyer. Having said that, we do have some thoughts on ways to try to create a more logical result. It’s not clear that these suggestions are supported by the statute, but we believe they are supported by good sense:
- At a minimum, perhaps the word “custodial” when talking about work-related childcare so the custodial parent can work should be read broadly to include expenses by both parents so that either parent can work. Years ago when a very common parenting plan had the non-custodial parent with the children “every Wednesday night and every other weekend,” the non-custodial parent might not have had childcare expenses unless the non-custodial parent was paying a daycare provider essentially on behalf of the custodial parent. Today, however, it is very common for a parent to be with the children for something approaching 90 days (approx. 25% of the year!) and for that parent to purchase childcare so that parent can work. And often parents have worked out a sharing of the childcare expenses. Therefore, perhaps amounts paid by either parent for work-related childcare should be at least part of the consideration.
- If the non-custodial parent’s contribution to childcare isn’t going to be credited, then perhaps the non-custodial parent’s contribution should not be included it in the child support calculation, even if part of it is needed so the custodial parent can work. Including it and having the non-custodial parent pay more child support as a result makes no sense!
- Perhaps we should include the non-custodial childcare expense along with the custodial childcare expense, and then create a credit at the bottom of the DC-637 form for the non-custodial parent’s portion of the childcare expenses. This would cause the childcare expense to be treated essentially in the same way as health insurance premiums are shared in proportion to income. This would create a logical and fair result that doesn’t discourage payment by the non-custodial parent for childcare expenses.
- Perhaps the best arrangement comes where the parents agree to treat all childcare expenses outside of the child support calculation. The parents agree to share the childcare expenses in proportion to income to mimic the results of health insurance premiums. This has another, very positive side effect. Childcare expenses tend to change considerably over a year and from year-to-year. For example, there’s often a huge drop in childcare costs when a child starts kindergarten. By not including childcare expenses in child support calculations, changes in childcare don’t necessarily have to cause the entire child support calculation to be revisited. This approach may not be “by the book,” but it creates a more just result. For what it’s worth, this approach is one our clients often find most acceptable in mediation.
Don’t Forget Childcare Credit
There is one consideration that none of this discussion addresses. There is a federal income tax Child Care Credit available to some parents who pay for work-related childcare. We won’t try to cover if and when this credit applies, but it’s worth noting that there are some tax benefits that may exist for the parent who actually pays for the childcare. So simply having one parent pay it and having the other parent reimburse the first parent may have a negative tax impact on the parent not paying the childcare provider directly.
And Don’t Forget Legal Advice!
Oh, and don’t forget the part about getting legal advice: it’s VERY important that you don’t think of Resolution Point’s articles as “legal advice.” Our goal is to get you familiar with some of the issues with very broad strokes. Please consult an attorney to determine how any of this may affect your actual situation.