Child Support in High Income MA Families

Child Support in High-Income Massachusetts Families

In Massachusetts, determining child support in high income families presents unique challenges that go beyond the standard guidelines calculations. While the Massachusetts Child Support Guidelines provide a clear framework for most families, special considerations apply when parents’ combined income exceeds the guidelines’ maximum threshold. At Weberg Law, we regularly guide high-income clients through these complex child support determinations to ensure fair and appropriate arrangements for their children.

The Massachusetts Child Support Guidelines Framework for High-Income Families

The 2021 Massachusetts Child Support Guidelines apply to combined available parental income up to $400,000 annually (approximately $7,692 weekly). This represents a significant increase from the previous $250,000 maximum in the 2018 guidelines. However, many high-income families in Massachusetts exceed even this higher threshold, requiring special consideration by the courts.

For families with combined income exceeding $400,000, the guidelines establish that:

1. The amount calculated at the $400,000 level is the presumptive minimum support order
2. Additional support may be ordered on income above $400,000
3. Any additional support ordered on income above $400,000 should be at a rate lower than the 10% applied to the highest income level in the guidelines

It’s important to understand that simply rerunning the guidelines worksheet on income above $400,000 is explicitly deemed “objectively incorrect” by the guidelines. This approach would inappropriately apply the higher percentage rates intended for lower income levels to the excess income.

Judicial Discretion in High-Income Cases

For income above $400,000, judges have significant discretion in determining appropriate child support amounts. The court will consider various factors, including:

1. The specific needs of the children
2. The standard of living the children would have enjoyed had the marriage remained intact
3. The disparity in income between households after base support is paid
4. The lifestyle maintained during the marriage
5. The ability of each parent to maintain appropriate housing and meet the children’s needs

Massachusetts courts have established important precedents regarding high-income child support cases. Two particularly significant cases include:

• Freedman v. Freedman, which established that courts should avoid creating a “castle and hovel” dichotomy between parents’ households
• Pearson v. Pearson, which recognized that while children should maintain their accustomed lifestyle, there are reasonable limits (famously noting that “no child needs three ponies”)

The Cavanagh Framework for High-Income Families

In 2022, the Massachusetts Supreme Judicial Court decided Cavanagh v. Cavanagh, which introduced a new three-step framework for calculating support when both child support and alimony are at issue. This framework is particularly relevant for high-income families:

Step 1: Calculate Alimony First

• Calculate alimony based on the parties’ incomes
• Then calculate child support using the parties’ post-alimony incomes
• Determine the net (after-tax) income each party would retain

Step 2: Calculate Child Support First

• Calculate child support based on the parties’ incomes
• Then calculate alimony based on any remaining income
• Determine the net (after-tax) income each party would retain

Step 3: Compare Results

• Compare the results of both calculations
• Determine which approach provides the most equitable outcome
• Consider the best interests of the children and the specific circumstances of the case

This framework recognizes that the same income cannot be used for both child support and alimony calculations, addressing what had been known as the “double dipping” problem.

Practical Approaches to High-Income Child Support

For high-income families, several practical approaches to child support have emerged:

Direct Payment for Specific Expenses

Rather than simply increasing the base child support amount, courts often order high-income parents to pay directly for specific expenses, such as:

• Private school tuition
• College expenses
• Extracurricular activities
• Summer camps
• Sports and other specialized training
• Medical expenses beyond basic healthcare
• Travel and vacation expenses
• Tutoring or educational support

This approach ensures that additional support directly benefits the children’s specific needs rather than simply increasing the recipient parent’s discretionary income.

Income Considerations Unique to High-Income Families

High-income families often have complex income sources that require careful analysis, including:

• Bonuses and commissions
• Stock options and restricted stock units
• Business income and distributions
• Investment income
• Trust distributions
• Perquisites and in-kind benefits

The 2022 Cavanagh decision expanded the definition of income for child support purposes to include employer contributions to retirement accounts and health savings accounts, as well as interest and dividends. This broader definition particularly impacts high-income families with diverse income sources.

Tax Implications

The tax implications of child support arrangements are especially significant for high-income families. While child support itself is not tax-deductible for the payor or taxable to the recipient, the allocation of tax benefits such as dependency exemptions can have substantial financial impact.

The guidelines specifically require courts to consider the allocation of personal exemptions for child dependents between the parties to the extent permitted by law. This consideration is particularly important in high-income cases where the tax benefits can be substantial.

Deviations from Guidelines in High-Income Cases

The guidelines explicitly recognize that deviations may be appropriate in high-income cases. Factors that might justify deviation include:

1. Extraordinary medical, educational, or travel expenses related to the children
2. Significant disparity in living standards between households
3. Extraordinary expenses for the children’s extracurricular activities
4. Additional household income from a parent’s new spouse or partner
5. The allocation of childcare responsibilities and parenting time

When requesting a deviation, it’s essential to provide specific evidence supporting why the deviation is in the children’s best interests and how the proposed support amount better meets their needs than the guidelines amount.

Practical Considerations for High-Income Parents

For the Paying Parent

If you’re a high-income parent who will be paying child support:

1. Be prepared to provide comprehensive documentation of all income sources
2. Consider proposing direct payment for specific expenses rather than simply increasing the base support amount
3. Analyze the tax implications of different support arrangements
4. Be prepared to demonstrate how your proposed support amount will maintain the children’s appropriate standard of living
5. Consider the impact of the Cavanagh framework if alimony is also at issue

For the Receiving Parent

If you’re the parent who will be receiving child support from a high-income co-parent:

1. Document the children’s needs and expenses thoroughly
2. Consider the children’s standard of living during the marriage
3. Be prepared to justify requests for support above the guidelines amount
4. Consider whether direct payment for specific expenses might be more beneficial than increased base support
5. Analyze how different support arrangements will affect your household budget and ability to meet the children’s needs

Conclusion

Child support in high-income Massachusetts families requires a nuanced approach that goes beyond the standard guidelines calculations. While the guidelines provide a starting point by establishing a presumptive minimum support amount, additional support on income above $400,000 is determined through careful consideration of the children’s needs, the family’s standard of living, and the specific circumstances of each case.

The Cavanagh framework has added another layer of complexity for high-income families where both child support and alimony are at issue, requiring careful analysis of different calculation approaches to determine the most equitable outcome.

At Weberg Law, we help high-income clients navigate these complex child support determinations, ensuring that arrangements are fair, appropriate, and focused on the children’s best interests. Whether you’re the paying or receiving parent, understanding the special considerations that apply to high-income child support cases is essential for achieving a fair and workable outcome.

For more information about child support in Massachusetts, including our child support calculator, visit our Massachusetts Child Support Calculator page.