Without unemployment insurance, many families would face even greater financial difficulty. Count yourself fortunate if you qualify to receive unemployment benefits. Each state has a Department of Labor that processes unemployment benefits for state residents. However, if you owe child support, the state will deduct the amount you owe from your unemployment benefits.
Your child support obligation does not end if you lost your job. The payments will continue to accumulate, putting you further in arrears. The court uses a calculation to figure out child support payments. Each state calculates child support payments differently. New York calculates child support based on adjusted gross income (AGI). The court applies different percentages according to the number of children. The percentage is 17 percent, 25 percent for two children and up to 35 percent for five children or more.
If you are receiving unemployment and owe child support, the state will deduct this amount from your benefit. Even if you apply for a modification, the state law requires that you pay a minimum of child support per month. For example, in New York the minimum child support payment is $25 to $50 depending on your circumstance.
In some cases you may not have to pay child support. For example, if you receive public assistance, New York will not deduct child support from your public assistance check. However, the arrears will continue to accumulate. You may end up owing a lot of back child support once you come off public assistance. You may also not have to pay child support if the custodial parent waives the right to collect.
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Filing a Petition
The best course of action is to file a petition to have the child support payments modified right away if you are on unemployment. You will be required to produce financial verification and reason why you are unable to continue paying the original court-ordered amount.
For tax reporting purposes, child support payments are nontaxable income to the custodial parent. And, the noncustodial parent cannot deduct child support payments from income when filing taxes. Use Form 1099-G to report income from state agencies such as unemployment and state tax refunds.