When Your W-2 Doesn’t Tell the Whole Story for Child Support
Child support in many states is generally based on gross income. In plain terms, that’s what you earn before subtracting federal or state income taxes, Social Security or Medicare (FICA) taxes, health insurance premiums, retirement plan contributions, or other payroll withholdings. Relying only on a W-2 can miss pieces of that picture.
How pre-tax benefit plans can mask income
Many large employers offer “cafeteria plans” (Section 125) that let employees pay for certain benefits with pre-tax dollars. Because those amounts aren’t taxable for federal (and often state) purposes, they don’t show up in taxable wages on a W-2—even though they’re part of what the child support rules treat as gross income.
Common cafeteria plan items include health, accident, disability and life insurance, adoption assistance, 401(k) contributions, health savings accounts, group legal services, and dependent care assistance.
What your W-2 actually reports
A W-2 lists only the wages subject to each tax, not all of your pre-tax pay:
Box 1 shows wages subject to federal income tax.
Boxes 3 and 5 show wages subject to Social Security and Medicare taxes.
Boxes 16 and 18 show wages subject to state and local taxes.
Pre-tax cafeteria deductions are excluded from the wage amounts reported in those boxes. One nuance: while 401(k) contributions reduce Box 1 (federal income tax wages), they’re still subject to Social Security and Medicare, so Boxes 3 and 5 will typically be higher than Box 1 for contributors.
Why this matters for child support worksheets
If you plug only W-2 wages into a child support worksheet, you may understate gross income because pre-tax deductions aren’t visible there. A year-end paystub (or final pay statement) captures the full list of payroll deductions and total compensation, making it the better source for identifying gross income under the guidelines. This is especially important when one spouse works for a large employer with robust benefits, where pre-tax deductions can be substantial.
Practical tip
Request both the W-2 and the year-end paystub during the disclosure process. Using them together reduces errors, limits disputes over what counts as income, and helps ensure support is calculated on the correct gross amount.
If you’d like help organizing these documents and aligning them with the applicable guidelines, FMD Wealth Advisors can work alongside your legal team to make sure nothing important is missed. Schedule a Free - Intro Call.
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