Under the Child Support Enforcement Act of 1988, all child support was to be placed under a payroll attachment, to address a perceive problem of non-payments, which was based simply on telephone interviews with mothers owed child support. The presumption is that they would not fib about such an important matter.
However, the poor accounting habits of the states made this all inclusive remedy nearly impossible. Payments were not being posted to the right case numbers, and/or not posted at all. It was not until nearly the turn of the century before this could be more widely applied, as computer technology grew. In the last 10+ years, a growing number of child support cases are being placed on payroll reduction, which has created some new problems....
What do I do if I don’t owe back child support?
I’m told I owe back child support. It’s garnished from my paycheck every week so i have no say in the matter. Now the state wants to take my tax return and give it to my ex. i have tried to call child support and i get nowhere. I’m running out of time to file my taxes i need some advice fast. Anyone have any ideas. Thank you - Posted in Yahoo! Answers April 3, 2010
When a child support obligor is under a weekly, or bi-weekly, payroll attachment for child support, eight (8) months out of the year, you are in arrears. This can result in an attachment to your Tax Return, with up to 18% in Interest Penalties. Or worse, after years of paying, and the children are aging out from getting child support, you suddenly learn you are tens of thousands of dollars in arrears, with more than a decade to go in continuing payments.
The problem that arises is both in the way employers are calculating payroll attachments, and how the computers at the State Child Support Enforcement Agency are registering each received payment.
Employers take what is order for each month, and determine the total for the years. They take that total and divide it by 52 or 26, depending on their specific payroll setup. As an example, I will use a child support payment amount of $400 per month.
The employer is deducting $92.31 a weekly paycheck or $184.62 every two weeks, for a total of $369.23 a month for 8 months of the year. For the other four months, the payments total $461.55 per month.
Unfortunately, the computers processing the payment see the $369.23 as an under payment, with $30.77 still owing. The $461.55 is simply treated as an over payment, or a gift of $61.55, rather than a balancing of the accounts for the year.
At the end of the year, this leaves a balance owing of $307.70, which then triggers an interest penalty due to being over $300. That interest penalty can run from 3% to 18%, depending on the state.
Using Wisconsin as a middle ground state of 8.2%, there can be an attachment to a tax return of $332.93. However, consider if the state simply accumulates the amount over the period of the child support order.
For Wisconsin, over a ten year period, the total owed would be $3077. However, there would be interest penalties of $2,746, for a total owing of $5,823. For a man paying as a result of a one-night-stand, over an 18 year time period, and not accounting for adjustments, the owed amount would be $5,538. With interest penalties of $8,930, the total would come to $14,469 still owed.
Add to this the fact that four months per year there was an over payment of 61.55, by the time the $14,469 is paid off; there would be a total over payment of nearly $20,000.
For a child support obligor ordered to pay $1000 a month, including interest, the final balance owing would be $36,172.
Employers do not look favorably on making payroll attachments of varying amounts, as it can create an accounting nightmare. As such, a method must be determined to address this issue. The simplest would be an adjustment to the programming of the computers processing the child support payments. However, in this economy, the states will not be willing to pay for a program change.
If the employer were to simply deduct 25% of the payment from each check, or 50% for bi-weekly payrolls, this would result in an over payment each year of about 10%. For Francois Jadotte of New York, he had found that he had over paid by $40,000 due to a weekly payroll attachment of 25% of his child support amount.
In the short term, the best recommendation would be to request an employer to deduct a full child support payment out of one payroll check per month, though that may not be possible if the payment exceeds the amount of one check.