Self-Employment Income and Child Support

Child support in Georgia is primarily based on the income of both parents. A concern often arises when one parent is self-employed because, for tax purposes, the self-employed parent often runs certain living expenses through their business and this could lead to an unfair result when it comes to calculating child support. However, in many cases, self-employment income is calculated differently for child support purposes than it is for tax purposes in terms of the expenses that may be deducted from the gross receipts.

In Georgia, income from self-employment includes income includes gross receipts minus ordinary and reasonable expenses required for self-employment or business operations. Ordinary and reasonable expenses of self-employment or business operations necessary to produce income do not include:

(1) Excessive promotional, travel, vehicle, or personal living expenses, depreciation on equipment, or costs of operation of home offices; or

(2) Amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court or the jury to be inappropriate for determining gross income.

In general, income and expenses from self-employment or operation of a business should be carefully reviewed by the court or the jury to determine an appropriate level of gross income available to the parent to satisfy a child support obligation.

O.C.G.A. § 19-6-15(f)(B)

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