[disso93001]

I received a rather large tax refund in 2009 due to an overpayment of estimated taxes related to the sale of stock. The date of the stock sale was April 2008. Should this tax refund be included with any other 2008 income in the calculation of my child support?

[s_cianci]

The tax refund, no. But the income generated from the sale of the stock may be fair game, depending on whether you made a profit (and since you had to pay tax, I'm assuming you did make a profit) and possibly other factors. Research the laws of your local jurisdiction or talk to a local family attorney for firsthand information.

[JudyKayTee]

In NY you are required to report any changes in the income you declared when child support was set. The refund qualifies as income as does the income from the sale of the stock.

I don't know where you are.

[cadillac59]

I received a rather large tax refund in 2009 due to an overpayment of estimated taxes related to the sale of stock. The date of the stock sale was April 2008. Should this tax refund be included with any other 2008 income in the calculation of my child support?

Yes and no. Allow me to explain.

It's somewhat of a loaded question because it depends up what state you are in and whether your state uses a before or after-tax guideline. As an example, here's how it would work in California: We use an after-tax guideline, which means that the child support formula is applied once taxes are taken out (and adjustments are made for other allowed deductions). Thus, anything which decreases tax liability increases child support (an area of confusion for many people). Since we have a very complex formula to calculate child support, we use a computer program to do the calculation. In calculating your child support, for example, we would have taken your gross income, including the income from the sale of the stock into account, and computer would have run a fast tax calculation and produced a child support number. Now, if the program estimated your taxes on the stock sale accurately (even if the withholding overestimated the tax) then your child support would have been based upon the correct tax liability and your refund would not generate any change in the child support guideline or any additional child support owed. If on the other hand the program overestimated your tax liability (like someone apparently did where you work), then you would have had a child support order that was below what it should have been and your refund would be the basis to reassess child support and would result in you owing more in support. See the logic to this?

Now typically, unless the judge specifically reserved jurisdiction to retroactively adjust support once your actual tax liability on the sale of the stock was determined, the court is not going to entertain a motion to modify child support simply because you received a tax refund. Theoretically I can envision someone coming up with that sort of creative argument, but as a practical matter I've never seen it happen.

If your state uses a before-tax guideline and the sale of the stock were included when the support order was made the tax refund would be of no consequence and would not be a basis to owe more in child support.

If you've never had a child support order put in place and, for example you were in California, we would not use the tax refund but the gross income from the stock sale, added to all your other income, and run a support calculation based upon all the most accurate tax info you used on your return. But since the tax refund represents after tax income then no, we would not include it in the calculation. Does this make sense?