Gun Trust CLE, September 6, 2018
South Carolina Yacht Club
Materials can be found at this link: https://web.tresorit.com/l#wrNggvGNd9F2P2DBblxvg
Materials can be found at this link: https://web.tresorit.com/l#wrNggvGNd9F2P2DBblxvg
Family Law CLE, November 9, 2019
Orders of Protection with Kana Rahman, Esquire
Resolving Financial Issues in Divorce with Guy Vitetta, Esquire
South Carolina Yacht Club 3-5pm, followed by Open Bar and Heavy Hors D'oeuvres for our members 5-6pm
Resolving Financial Issues in Divorce with Guy Vitetta, Esquire
South Carolina Yacht Club 3-5pm, followed by Open Bar and Heavy Hors D'oeuvres for our members 5-6pm
Materials from Guy Vitteta, Esquire
Palmetto Automated Child Support System
Congress passed the Family Support Act of 1988 (FSA 88 Public Law (P.L.) 100-485), enacted October 13, 1988, mandating the implementation of automated child support systems in every state; requiring that such systems be fully operational not later than October 1, 1995;
South Carolina is the only state not in compliance.
Since August 2016 Xerox has been working with DSS to transfer and implement in South Carolina a federally certified Child Support system in use by the State of Delaware. It is called the Palmetto Automated Child Support System (PACSS).
Xerox will also implement a Family Court Case Management System (FCCMS) to be used by County Clerks of Court throughout the state. The performance period of the Xerox contract is 4 years with implementation scheduled for both systems in 2019.
Implemented October 1, 2018 in Aiken, Fairfield, Sumter and York counties and will be phased in state wide over the next 10 months. PACSS will create uniform system of electronic child support case management throughout South Carolina and the other 49 states in the United States. PACSS sets certain minimum requirements that each state must meet, in order to be certified, regarding the collection, storage and use of child support data.
A key objective of PACSS is that the system must electronically interface with all appropriate sources to obtain, locate, and verify assets and other information on the noncustodial/putative parent or custodial parent. Each system must have automated interfaces with federal, interstate, and intrastate sources and the ability to interface with other government agencies when necessary.
As PACSS is being implemented in South Carolina the Supreme Court is mandating the use of certain revised child support forms (Appendix A).
It is estimated that tens of billions of dollars are owed to custodial parents in the United States. It is hoped that PACSS will greatly add in child support management and enforcement in South Carolina.
ALIMONY
What's new in the 2018 Tax Law:
The 2018 tax law is a significant change from prior tax law as it relates to Family Law.
• Most provisions took effect 1.1.2018.
• Almost all changes for households expire in 2023.
• Almost all changes for corporations are permanent.
• Chained CPI is not used to measure inflation. Chained CPI is a way to index spending and taxes -- including Social Security benefits -- to the rate of inflation, or the rise in prices over time. But it's not the only way.
• Marriage penalty eliminated for households under $600,000.
• Certain high income Single ($370,000-$451,000) and HOH (250,000-552,000) filers may pay more.
• $4,150 deduction per dependent exemption is eliminated
• Use of child tax credit can be beneficial
• State and Local taxes limited (value assessed prior to 12.31.2017)
• Residence interest: Interest deduction limited to mortgages up to $750,000 for married/ jointly, half of this for married separate for home purchased prior to 12.15.2017.
• Refinances exempted as long as limited to the old indebtedness.
• Home Equity interest deduction eliminated if not used to buy, build or substantially improve the subject residence.
• Alimony:
• Eliminates the deduction and tax effect on income
• Filed after 12.31.2018
• Not applicable to decrees entered on or before 12.31.2018
• Not applicable to modifications after 12.31.18 provided that the order expressly states that the modified amount of alimony relates back to the original award (i.e. is not a new award, subject to the new rules).
• Will increase child support
• Increases the standard deduction
• Singe/Married Separate $6500 - $12,000
• HOH 9,550 - $18,000
• Married Jointly $13,000 - $24,000
Alimony in practice:
The possibility of permanent alimony fuels a great deal of family court litigation. South Carolina has a strong preference for periodic alimony, and absent exceptional circumstances, if the court finds alimony is appropriate, it will order periodic alimony.
On July 15, 2015 the South Carolina Court of Appeals in Ricigliano v Ricigliano reversed an award of rehabilitative alimony given to Husband by one of our resident Family Court judges. The Court of Appeals awarded Husband permanent alimony and sent the case back to the trial court only for a determination of the amount.
The court based it's ruling on a strict adherence to consideration of the required factors when making an award of alimony. If consideration of the 13 required factors leads to a finding of alimony, then courts are being told to award permanent alimony:
…the family court clearly erred in awarding Husband rehabilitative alimony. As noted, the law favors the award of permanent periodic alimony, and rehabilitative alimony may be awarded only in exceptional circumstances, when there has been a showing of special circumstances justifying a departure from the normal preference for permanent periodic support.
Ricigliano at 7
There has been some effort on the part of lawyers recently to argue for an “equalization of incomes” when alimony is an issue. The required alimony factors do not require a judge to seek, find, or in any way try to achieve an equalization of incomes. Clearly equalization is not the law, but the alimony factors really don't provide us with a rational way to arrive at a sufficient number, leaving lawyers to guess what may happen with any given set of facts.
Once periodic alimony has been ordered, it is always subject to modification based upon a change in circumstances. Lawyers typically argue that if a change in circumstances had been “anticipated” at the time of divorce, then it should not be the basis for a modification. For an excellent analysis of the requirements for modification of alimony, see Roof v. Steele, where the court found that the mere fact that a future event is anticipated will not automatically bar a subsequent request for modification of alimony:
In light of Calvert and subsequent Court of Appeals cases, courts usually consider only those changes that were unknown to the parties at the time of the separation decree in determining if a substantial change has occurred warranting a modification of alimony. The original divorce decree generally addresses these expected changes. However, there are some future changes which may be in contemplation of the parties at the time of the decree but, due to other *386 considerations, cannot be addressed at that time in the divorce decree.
Roof v. Steele, 396 S.C. 373, 385-86, 720 S.E.2d 910, 917 (Ct. App. 2011)
Children graduating (or leaving) High School many years down the road and becoming independent, thus ending child support, is clearly an anticipated event. However, Roof instructs that a future event, even if anticipated by all parties at the time of the divorce, may still be such that it will permit a subsequent modification based upon an analysis of the 13 alimony factors. The key here is not the mere fact that the future event is anticipated at the time of the divorce, but rather whether the future financial implications to the parties of the changed event can be adequately understood and addressed by the parties at the time of the divorce. If parties divorce when the children are 6 and 8 years old, certainly their eventual emancipation is clear to all at the time of the divorce, but it is simply not possible to anticipate all of the vagaries of the parties economic situation 10 and 8 years down the road.
CHILDREN'S ISSUES
The 2018 tax law made some significant changes that directly impact family law cases involving children. Most significantly was the elimination of the dependency exemption and the doubling of the child tax credit. (Exhibit A: Who Benefits From The Child Tax Credit Now?). Do lawyers treat this the same way as the former dependency exemption? Can we share the tax credit in alternating years?
Special rules apply for divorced or separated parents or parents who live apart. A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following apply:
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the tax year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the tax year.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return.
How the Child Tax Credit Works:
As written, the child tax credit will be increased to $2,000 per qualifying child and will be refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents (for example, older adults). Phaseouts, which are not indexed for inflation, will begin with adjusted gross income of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers.
When we think about tax breaks, we tend to lob tax credits and deductions into the same category, when in reality they're very different beasts. A tax deduction works by exempting a portion of your income from taxes, and your savings is based on your effective tax rate. So if you snag a $4,000 deduction, and your effective tax rate is 25%, that translates into $1,000 of actual savings.
A tax credit, on the other hand, is a dollar-for-dollar reduction of your tax liability, and your associated savings aren't dependent on your effective tax rate. In other words, a $1,000 tax credit is worth $1,000 to someone making $50,000 and someone making three times that amount -- which is why credits are so lucrative.
Claiming the Child Tax Credit for 2017
To claim the Child Tax Credit this year -- meaning, on your 2017 return -- you must have At least one child in the household under age 17 who was born before 2018. :
$75,000/ single filer.
$110,000/filing jointly.
$50 reduction in your credit per $1,000 of excess income, until the credit is wiped out completely.
Claiming the Child Tax Credit after 2018 +
$200,000 for single tax filers.
$400,000 for married couples filing jointly.
Remember, the Child Tax Credit is only one of many tax breaks available to parents, so even if you don't get to claim it right away, there may be other deductions or credits you're eligible for. And given the cost of raising kids these days, it pays to get your hands on as much money as you can.
Nearly doubles the standard deduction to $24,000 for married couples who file jointly and $12,000 for singles. (12,700/ $6,350).
Starting in 2018, the tax overhaul repeals personal exemptions, which are valued at $4,050 per taxpayer, spouse and dependent in 2017.
Families, especially those with multiple children and single-parent households, will keenly feel the loss of these exemptions, even though these tax breaks are supposed to return in 2025.
"Doubling the standard deduction is nice if you're a married couple with no kids," said Stan Veliotis, director of the Center for Professional Accounting Practices at Fordham University.
Value of exemptions
Under current law, a married couple with adjusted gross income of $75,000 and two kids would have a total of $16,600 in personal exemptions in 2018 (or $4,150 per person, due to inflation adjustments).
When including the standard deduction of $13,000 for married filing jointly, the filers' taxable income falls by $29,600, according to case studies from the Urban-Brookings Tax Policy Center.
Meanwhile, under the new tax bill, this same couple would have only the standard deduction of $24,000 for joint filers who are married.
The couple would benefit from the enhanced child tax credit, which will double to $2,000 per child under the GOP's tax overhaul.
In all, the family's taxes would fall by $2,119 in 2018, according to the Tax Policy Center.
"It's a trade-off: You lose the personal exemption, but you get a bigger child tax credit and standard deduction," said Howard Gleckman, senior fellow at the Tax Policy Center. "When all that goes away, you pay a little more."
Inflation indexes
By 2027, this hypothetical family with two kids would wind up paying an additional $150 in taxes, compared with what they'd pay under today's framework because the enhanced child tax credits — and a range of individual income tax provisions — expire in 2025, the Tax Policy Center found.
That family would also suffer because the tax overhaul changes the metric the IRS uses to adjust brackets, standard deductions and other details for inflation.
Today, inflation adjustments are based on the consumer price index.The bill, however, changes to the chained consumer price index, which rises more slowly.
In turn, this means the inflation increases for the standard deduction and the tax brackets would be less generous than they are now and could result in tax increases for filers in the future.
"The personal exemption will come back, but it becomes less valuable," Gleckman said. "It goes to the chained CPI and the increase for inflation will be smaller over time."
South Carolina uses the "Income Share Model".
South Carolina has adopted and uses the Income Share Model. This means that our guidelines try to reach a level of support for the child that is the same amount of support as if the parents lived together. The South Carolina Child Support Guidelines calculate each parent's percentage of income that would have been devoted to the child had the parents remained living together. The support obligation is pro-rated between the parents depending on their share of the total income. In other words, if a child’s custodial parent makes $2,000 a month and the noncustodial parent brings in $3,000, the noncustodial parent assumes 60% of the support obligation.
It is the responsibility of Social Services to establish the Guidelines:
(b) The department shall promulgate regulations which establish guidelines for minimum contributions which must be applied by the courts in determining the amount that an absent parent is expected to pay toward the support of a dependent child. Copies of the guidelines must be made available to courts, district attorneys, and to the public. The guidelines formulated pursuant to this section must be applied pursuant to the provisions of Section 63-17-470. S.C. Code Ann. § 43-5-580
“In determining the amount of child support, the family court is generally required to follow the child support guidelines; although the family court may deviate from the guidelines, any deviation must be justified and should be the exception rather than the rule.” LaFrance v LaFrance.
Be advised that the statute creates a reputable presumption that the Guidelines are correct!
Traditionally child support was calculated by hand in South Carolina by filling out the paper worksheets. As technology has developed the Guidelines have been automated. However, Attorneys sometimes wonder why the handwritten worksheets, the online DSS calculator and other calculators all differ slightly when using the same numbers. The simple answer is that the Guidelines are a written set of algebraic instructions that leave the actual calculations up to the user. Decimal place and rounding decisions will often cause the end result to vary slightly, yet all will be in a accord with South Carolina law ( See § 63-17-470; Sherman v. Sherman, 307 SC 280, Ct. App. 1992).
Unique Child Support Considerations
We are all accustomed to worksheets A, B and C of the South Carolina Child Support Guidelines. But what about situations that are not contemplated by the Guidelines, such as when a grandparent has custody of a child or cases where the parties’ incomes are in excess of the guidelines?
In order to provide a reasoned calculation upon which parties can form the basis of settlement discussions, certain software programs may be of assistance.
Settlyd is a cloud based software program that provides a way to calculate all of these scenario’s. If you have a case that falls squarely within the Guideline A, B or C, simply open your child support page on Settlyd and either select a worksheet that you have saved or open a new worksheet.
However, life rarely falls squarely within “Guidelines”, so Settlyd has provided you with several options options to help you quickly and precisely calculate child support for any circumstance that may arise with your clients.
Settlyd’s “Third Party Calculator” provides a way to calculate child support on behalf of a third party, such as a grandparent or aunt or uncle, who has become charged with the responsibility of raising a child.
While South Carolina has no mandated formula for determining child support when parties other than the parents have custody Settlyd bases the amounts on the existing guidelines, the applicable data requested on the calculator taking into account the varied approaches for tax credits based on third party custodial arrangements. The Court has the final authority to determine unique child support payment arrangements. Rather than generate mandated child support figures, the Settlyd Third Party child support calculator is provided to give practitioners and other Family Law professionals guidance in addressing such issues when they are present in individual cases.
Sometimes attorneys represent clients whose combined income is in excess of the Child Support income tables. Settlyd has created an “Excess Calculation” for these situations.
There is no mandated formula for determining child support in South Carolina when the parties combined monthly income exceeds $30,000. Rather such instances are to be determined on a "case-by-case basis". The Settlyd Excess Guidelines calculator provides two different calculations, both based on extrapolations from the existing South Carolina Child Support Guidelines, and is designed to provide practitioners foundational analysis for cases in which the parties' income exceeds the range specifically provided for by the Guidelines.
Palmetto Automated Child Support System
Congress passed the Family Support Act of 1988 (FSA 88 Public Law (P.L.) 100-485), enacted October 13, 1988, mandating the implementation of automated child support systems in every state; requiring that such systems be fully operational not later than October 1, 1995;
South Carolina is the only state not in compliance.
Since August 2016 Xerox has been working with DSS to transfer and implement in South Carolina a federally certified Child Support system in use by the State of Delaware. It is called the Palmetto Automated Child Support System (PACSS).
Xerox will also implement a Family Court Case Management System (FCCMS) to be used by County Clerks of Court throughout the state. The performance period of the Xerox contract is 4 years with implementation scheduled for both systems in 2019.
Implemented October 1, 2018 in Aiken, Fairfield, Sumter and York counties and will be phased in state wide over the next 10 months. PACSS will create uniform system of electronic child support case management throughout South Carolina and the other 49 states in the United States. PACSS sets certain minimum requirements that each state must meet, in order to be certified, regarding the collection, storage and use of child support data.
A key objective of PACSS is that the system must electronically interface with all appropriate sources to obtain, locate, and verify assets and other information on the noncustodial/putative parent or custodial parent. Each system must have automated interfaces with federal, interstate, and intrastate sources and the ability to interface with other government agencies when necessary.
As PACSS is being implemented in South Carolina the Supreme Court is mandating the use of certain revised child support forms (Appendix A).
It is estimated that tens of billions of dollars are owed to custodial parents in the United States. It is hoped that PACSS will greatly add in child support management and enforcement in South Carolina.
ALIMONY
What's new in the 2018 Tax Law:
The 2018 tax law is a significant change from prior tax law as it relates to Family Law.
• Most provisions took effect 1.1.2018.
• Almost all changes for households expire in 2023.
• Almost all changes for corporations are permanent.
• Chained CPI is not used to measure inflation. Chained CPI is a way to index spending and taxes -- including Social Security benefits -- to the rate of inflation, or the rise in prices over time. But it's not the only way.
• Marriage penalty eliminated for households under $600,000.
• Certain high income Single ($370,000-$451,000) and HOH (250,000-552,000) filers may pay more.
• $4,150 deduction per dependent exemption is eliminated
• Use of child tax credit can be beneficial
• State and Local taxes limited (value assessed prior to 12.31.2017)
• Residence interest: Interest deduction limited to mortgages up to $750,000 for married/ jointly, half of this for married separate for home purchased prior to 12.15.2017.
• Refinances exempted as long as limited to the old indebtedness.
• Home Equity interest deduction eliminated if not used to buy, build or substantially improve the subject residence.
• Alimony:
• Eliminates the deduction and tax effect on income
• Filed after 12.31.2018
• Not applicable to decrees entered on or before 12.31.2018
• Not applicable to modifications after 12.31.18 provided that the order expressly states that the modified amount of alimony relates back to the original award (i.e. is not a new award, subject to the new rules).
• Will increase child support
• Increases the standard deduction
• Singe/Married Separate $6500 - $12,000
• HOH 9,550 - $18,000
• Married Jointly $13,000 - $24,000
Alimony in practice:
The possibility of permanent alimony fuels a great deal of family court litigation. South Carolina has a strong preference for periodic alimony, and absent exceptional circumstances, if the court finds alimony is appropriate, it will order periodic alimony.
On July 15, 2015 the South Carolina Court of Appeals in Ricigliano v Ricigliano reversed an award of rehabilitative alimony given to Husband by one of our resident Family Court judges. The Court of Appeals awarded Husband permanent alimony and sent the case back to the trial court only for a determination of the amount.
The court based it's ruling on a strict adherence to consideration of the required factors when making an award of alimony. If consideration of the 13 required factors leads to a finding of alimony, then courts are being told to award permanent alimony:
…the family court clearly erred in awarding Husband rehabilitative alimony. As noted, the law favors the award of permanent periodic alimony, and rehabilitative alimony may be awarded only in exceptional circumstances, when there has been a showing of special circumstances justifying a departure from the normal preference for permanent periodic support.
Ricigliano at 7
There has been some effort on the part of lawyers recently to argue for an “equalization of incomes” when alimony is an issue. The required alimony factors do not require a judge to seek, find, or in any way try to achieve an equalization of incomes. Clearly equalization is not the law, but the alimony factors really don't provide us with a rational way to arrive at a sufficient number, leaving lawyers to guess what may happen with any given set of facts.
Once periodic alimony has been ordered, it is always subject to modification based upon a change in circumstances. Lawyers typically argue that if a change in circumstances had been “anticipated” at the time of divorce, then it should not be the basis for a modification. For an excellent analysis of the requirements for modification of alimony, see Roof v. Steele, where the court found that the mere fact that a future event is anticipated will not automatically bar a subsequent request for modification of alimony:
In light of Calvert and subsequent Court of Appeals cases, courts usually consider only those changes that were unknown to the parties at the time of the separation decree in determining if a substantial change has occurred warranting a modification of alimony. The original divorce decree generally addresses these expected changes. However, there are some future changes which may be in contemplation of the parties at the time of the decree but, due to other *386 considerations, cannot be addressed at that time in the divorce decree.
Roof v. Steele, 396 S.C. 373, 385-86, 720 S.E.2d 910, 917 (Ct. App. 2011)
Children graduating (or leaving) High School many years down the road and becoming independent, thus ending child support, is clearly an anticipated event. However, Roof instructs that a future event, even if anticipated by all parties at the time of the divorce, may still be such that it will permit a subsequent modification based upon an analysis of the 13 alimony factors. The key here is not the mere fact that the future event is anticipated at the time of the divorce, but rather whether the future financial implications to the parties of the changed event can be adequately understood and addressed by the parties at the time of the divorce. If parties divorce when the children are 6 and 8 years old, certainly their eventual emancipation is clear to all at the time of the divorce, but it is simply not possible to anticipate all of the vagaries of the parties economic situation 10 and 8 years down the road.
CHILDREN'S ISSUES
The 2018 tax law made some significant changes that directly impact family law cases involving children. Most significantly was the elimination of the dependency exemption and the doubling of the child tax credit. (Exhibit A: Who Benefits From The Child Tax Credit Now?). Do lawyers treat this the same way as the former dependency exemption? Can we share the tax credit in alternating years?
Special rules apply for divorced or separated parents or parents who live apart. A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following apply:
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the tax year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the tax year.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return.
How the Child Tax Credit Works:
As written, the child tax credit will be increased to $2,000 per qualifying child and will be refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents (for example, older adults). Phaseouts, which are not indexed for inflation, will begin with adjusted gross income of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers.
When we think about tax breaks, we tend to lob tax credits and deductions into the same category, when in reality they're very different beasts. A tax deduction works by exempting a portion of your income from taxes, and your savings is based on your effective tax rate. So if you snag a $4,000 deduction, and your effective tax rate is 25%, that translates into $1,000 of actual savings.
A tax credit, on the other hand, is a dollar-for-dollar reduction of your tax liability, and your associated savings aren't dependent on your effective tax rate. In other words, a $1,000 tax credit is worth $1,000 to someone making $50,000 and someone making three times that amount -- which is why credits are so lucrative.
Claiming the Child Tax Credit for 2017
To claim the Child Tax Credit this year -- meaning, on your 2017 return -- you must have At least one child in the household under age 17 who was born before 2018. :
$75,000/ single filer.
$110,000/filing jointly.
$50 reduction in your credit per $1,000 of excess income, until the credit is wiped out completely.
Claiming the Child Tax Credit after 2018 +
$200,000 for single tax filers.
$400,000 for married couples filing jointly.
Remember, the Child Tax Credit is only one of many tax breaks available to parents, so even if you don't get to claim it right away, there may be other deductions or credits you're eligible for. And given the cost of raising kids these days, it pays to get your hands on as much money as you can.
Nearly doubles the standard deduction to $24,000 for married couples who file jointly and $12,000 for singles. (12,700/ $6,350).
Starting in 2018, the tax overhaul repeals personal exemptions, which are valued at $4,050 per taxpayer, spouse and dependent in 2017.
Families, especially those with multiple children and single-parent households, will keenly feel the loss of these exemptions, even though these tax breaks are supposed to return in 2025.
"Doubling the standard deduction is nice if you're a married couple with no kids," said Stan Veliotis, director of the Center for Professional Accounting Practices at Fordham University.
Value of exemptions
Under current law, a married couple with adjusted gross income of $75,000 and two kids would have a total of $16,600 in personal exemptions in 2018 (or $4,150 per person, due to inflation adjustments).
When including the standard deduction of $13,000 for married filing jointly, the filers' taxable income falls by $29,600, according to case studies from the Urban-Brookings Tax Policy Center.
Meanwhile, under the new tax bill, this same couple would have only the standard deduction of $24,000 for joint filers who are married.
The couple would benefit from the enhanced child tax credit, which will double to $2,000 per child under the GOP's tax overhaul.
In all, the family's taxes would fall by $2,119 in 2018, according to the Tax Policy Center.
"It's a trade-off: You lose the personal exemption, but you get a bigger child tax credit and standard deduction," said Howard Gleckman, senior fellow at the Tax Policy Center. "When all that goes away, you pay a little more."
Inflation indexes
By 2027, this hypothetical family with two kids would wind up paying an additional $150 in taxes, compared with what they'd pay under today's framework because the enhanced child tax credits — and a range of individual income tax provisions — expire in 2025, the Tax Policy Center found.
That family would also suffer because the tax overhaul changes the metric the IRS uses to adjust brackets, standard deductions and other details for inflation.
Today, inflation adjustments are based on the consumer price index.The bill, however, changes to the chained consumer price index, which rises more slowly.
In turn, this means the inflation increases for the standard deduction and the tax brackets would be less generous than they are now and could result in tax increases for filers in the future.
"The personal exemption will come back, but it becomes less valuable," Gleckman said. "It goes to the chained CPI and the increase for inflation will be smaller over time."
South Carolina uses the "Income Share Model".
South Carolina has adopted and uses the Income Share Model. This means that our guidelines try to reach a level of support for the child that is the same amount of support as if the parents lived together. The South Carolina Child Support Guidelines calculate each parent's percentage of income that would have been devoted to the child had the parents remained living together. The support obligation is pro-rated between the parents depending on their share of the total income. In other words, if a child’s custodial parent makes $2,000 a month and the noncustodial parent brings in $3,000, the noncustodial parent assumes 60% of the support obligation.
It is the responsibility of Social Services to establish the Guidelines:
(b) The department shall promulgate regulations which establish guidelines for minimum contributions which must be applied by the courts in determining the amount that an absent parent is expected to pay toward the support of a dependent child. Copies of the guidelines must be made available to courts, district attorneys, and to the public. The guidelines formulated pursuant to this section must be applied pursuant to the provisions of Section 63-17-470. S.C. Code Ann. § 43-5-580
“In determining the amount of child support, the family court is generally required to follow the child support guidelines; although the family court may deviate from the guidelines, any deviation must be justified and should be the exception rather than the rule.” LaFrance v LaFrance.
Be advised that the statute creates a reputable presumption that the Guidelines are correct!
Traditionally child support was calculated by hand in South Carolina by filling out the paper worksheets. As technology has developed the Guidelines have been automated. However, Attorneys sometimes wonder why the handwritten worksheets, the online DSS calculator and other calculators all differ slightly when using the same numbers. The simple answer is that the Guidelines are a written set of algebraic instructions that leave the actual calculations up to the user. Decimal place and rounding decisions will often cause the end result to vary slightly, yet all will be in a accord with South Carolina law ( See § 63-17-470; Sherman v. Sherman, 307 SC 280, Ct. App. 1992).
Unique Child Support Considerations
We are all accustomed to worksheets A, B and C of the South Carolina Child Support Guidelines. But what about situations that are not contemplated by the Guidelines, such as when a grandparent has custody of a child or cases where the parties’ incomes are in excess of the guidelines?
In order to provide a reasoned calculation upon which parties can form the basis of settlement discussions, certain software programs may be of assistance.
Settlyd is a cloud based software program that provides a way to calculate all of these scenario’s. If you have a case that falls squarely within the Guideline A, B or C, simply open your child support page on Settlyd and either select a worksheet that you have saved or open a new worksheet.
However, life rarely falls squarely within “Guidelines”, so Settlyd has provided you with several options options to help you quickly and precisely calculate child support for any circumstance that may arise with your clients.
Settlyd’s “Third Party Calculator” provides a way to calculate child support on behalf of a third party, such as a grandparent or aunt or uncle, who has become charged with the responsibility of raising a child.
While South Carolina has no mandated formula for determining child support when parties other than the parents have custody Settlyd bases the amounts on the existing guidelines, the applicable data requested on the calculator taking into account the varied approaches for tax credits based on third party custodial arrangements. The Court has the final authority to determine unique child support payment arrangements. Rather than generate mandated child support figures, the Settlyd Third Party child support calculator is provided to give practitioners and other Family Law professionals guidance in addressing such issues when they are present in individual cases.
Sometimes attorneys represent clients whose combined income is in excess of the Child Support income tables. Settlyd has created an “Excess Calculation” for these situations.
There is no mandated formula for determining child support in South Carolina when the parties combined monthly income exceeds $30,000. Rather such instances are to be determined on a "case-by-case basis". The Settlyd Excess Guidelines calculator provides two different calculations, both based on extrapolations from the existing South Carolina Child Support Guidelines, and is designed to provide practitioners foundational analysis for cases in which the parties' income exceeds the range specifically provided for by the Guidelines.
Super CLE, February 11, 2019
The information herein is provided for attendees of the Hilton Head Bar Association CLEs and is NOT intended as legal advice from this association or any of its speakers. Should you need legal advice, please consult with a licensed attorney.
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Steven Spitz, Esquire
materials to be added at a later date
Kathleen Barnes, Esquire
materials to be added at a later date
Harry Goldberg, Esquire
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Barbara Seymour, Esquire: Ethics
materials to be added at a later date
Desa Ballard, Esquire
Francine Norz, Esquire
materials to be added at a later date
The Honorable Deborah Malphrus, Family Court Judge
Senator Thomas C. Davis
materials to be added at a later date
