1240—2—4—.03 GUIDELINES FOR CALCULATING CHILD SUPPORT AWARDS.

(1) For clarity, the parent with whom the child(ren) live primarily will be referred to as the obligee and the parent with whom the child(ren) do not primarily live will be referred to as the obligor.

(2) The child support award is based on a flat percentage of the obligor s net income as defined in paragraph (4) below depending on the number of children for whom support is being set in the instant case. While the income of the obligee should not be considered in the calculation of or as a reason for deviation from the guidelines in determining the support award amount, the formula presumes that the obligee will be expending at least an equal percentage of net income as that of the obligor for the support of children from whom support is sought.

(3) Gross income.

(a) Gross income shall include all income from any source (before taxes and other deductions), whether earned or unearned, and includes but is not limited to, the following: wages, salaries, commissions, bonuses, overtime payments, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, benefits received from the Social Security Administration, i.e., Title II Social Security benefits, workers compensation benefits, whether temporary or permanent, judgments recovered for personal injuries, unemployment insurance benefits, gifts, prizes, lottery winnings, alimony or maintenance, and income from self-employment. Income from self-employment includes income from business operations and rental properties, etc., less reasonable expenses necessary to produce such income. Depreciation, home offices, excessive promotional, excessive travel, excessive car expenses, or excessive personal expenses, etc. should not be considered reasonable expenses. In kind remuneration must also be imputed as income, i.e. fringe benefits such as a company car, the value of on-base lodging and meals in lieu of BAQ and BAS for a military member, etc.

(b) Variable income such as commissions, bonuses, overtime pay, dividends, etc., should be averaged and added to the obligor s fixed salary.

(c) Gross income does not include the following: child support payments received by either parent for the benefit of other children; benefits received from means-tested public assistance programs otherwise exempt by federal law or regulation such as aid to families with dependent children (AFDC) and food stamps of Supplemental Security Income (SSI).

(d) If an obligor is willfully and voluntarily unemployed or underemployed, child support shall be calculated based on a determination of potential income, as evidenced by educational level and/or previous work experience.

(e) When establishing an initial order and the obligor fails to produce evidence of income (such as tax returns for prior years, check stubs, or other information for determining current ability to support of ability to support in prior years), and the court has no other reliable evidence of the obligor s income or income potential, gross income for the current and prior years should be determined by imputing annual income of $25,761. This figure represents an average of the median annual income for Tennessee families as provided by the 1990 U.S. Census of Income and Poverty data for Tennessee Counties.

(f) When cases with established orders are reviewed for adjustment and the obligor fails to produce evidence of income (such as tax returns for prior years, check stubs, or other information for determining current ability to support), and the court has no other reliable evidence of the obligor s income or income potential, the court should enter an order to increase the child support obligation by an increment not to exceed ten percent (10%) per year for each year since the support order was entered or last modified.

(4) Net income is calculated by subtracting from gross income of the obligor s FICA (6.2% Social Security + 1.45% Medicare for regular wage earners and 12.4% Social Security + 2.9% Medicare for self-employed, as of 1991, or any amount subsequently set by federal law as FICA tax), the amount of withholding tax deducted for a single wage earner claiming one withholding allowance (copies of appropriate table will be provided to courts with guidelines), and the amount of child support ordered pursuant to a previous order of child support for other children. Payment may be ordered to be weekly, biweekly (every two weeks), semi-monthly, or monthly. In calculating net income for obligors who are under federal or railroad retirement programs or any other mandatory retirement plan which operates in lieu of the Social Security retirement program, the retirement contribution up to the current FICA tax rate should be subtracted from the gross income. Children of the obligor who are not included in a decree of child support shall not be considered for the purposes of reducing the obligor s net income or in calculating the guideline amount. In addition, these children should not be considered by the court as a reason for deviation unless they meet the requirements of Rule 1240-2-4-.04(4).

(5) After determining the net income of the obligor, that amount is to be rounded up to the next dollar. That amount is then multiplied by the percentage below that corresponds to the number of children for whom support is being set in the instant case. The percentages are:

No. of Children 1 2 3 4 5 or more

% of Income 21% 32% 41% 46% 50%