Child Support Statute Requires that the Guideline Calculations Equally Divide Dependent-Child Tax Exemptions Regardless of How the Exemptions are Actually Divided

In Merchant v. Merchant, 2015 VT 72 (May 15, 2015), the Vermont Supreme Court held that child support guideline calculations must be based on the equal division of dependent-child tax exemptions and declined to decide whether parties could stipulate to bypass consideration of child-care costs.

Issue: Father’s motion to modify child support was denied because there was not a 10% change. He appealed, arguing that: 1) the guideline calculation should not equally divided the dependent-child tax exemptions when Mother receives all of them under the Final Divorce Order; 2) the guideline calculations should not include child-care costs when the parties agreed to each pay the child-care costs incurred during their parent-child contact time; and 3) his self-employment and subcontracting income was incorrectly calculated.

Holding: The Vermont Supreme Court held that the plain language of 21 V.S.A. 65 requires that child support be calculated with the dependent-child tax exemptions equally divided between the parties, even if the parties have agreed to a different division in the Final Order. The Court held that the Legislature could have intended to simplify the child support calculations by imposing this assumption. It invited the Legislature to amend the statute if it intended for “available income” to account for the actual allocation of dependent-child tax exemptions. If the parties have agreed to a different division, it should be addressed in the deviation analysis. With respect to child-care costs, the Court declined to decide whether parents can bypass consideration of these costs in the child support calculations by stipulation. Instead, it found that the parties did not intend such a stipulation because the original child support order considered these expenses. Lastly, the Court held that the findings regarding his income were supported by the evidence. The fact that there was a different possible method to calculate income was not grounds for reversal.