Self-Employment Income for Child Support Purposes

A self-employed father brought a modification action seeking a reduction in child support.   In calculating support, the Probate Court deducted from his gross income amounts for pension, profit sharing, and taxes.  The Appeals Court vacated the support award.   Gross income for child-support purposes, the Court noted, is not necessarily equivalent to a parent’s taxable income.  In determining self-employment income, “a judge must determine whether claimed business deductions are reasonable and necessary to the production of income, without regard to whether those deductions” are appropriate for income-tax purposes.  Although the current Guidelines did not apply in this case, the Court observed that these Guidelines now explicitly address self-employment, where the prior Guidelines did not.  Specifically, the current Guidelines urge self-employment income to be “carefully reviewed [in order] to determine the appropriate level of gross income   .  .  .  [which] in many cases .  .  . will differ from a determination of business income for tax purposes.”  Guidelines I-C (2009).   Whelan v. Whelan, 74 Mass.App.Ct. 616 (July 6, 2009).