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per diem and ot

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dad20102

Junior Member
What is the name of your state (only U.S. law)? order is in la

i have to go to a child support hearing in covington, louisiana on wed. morning.

the last cild support order was done in 2006, based on my income of $42000 year.

now i have a job that isnt an hourly or salary type job. i get paid a day rate plus per diem. i do catastrophe insurance adjusting and i get paid $174 per day plus $151 per day perdiem.

depending on claim activity, i've been working 6-7 days per week so when i bring my recent pay stubs, it looks like i make a lot, but it's ok because i've been woking so many days.

how should the child spport be calculated? will they includethe per diem? what about "overtime"? since i'm not paid hourly, how is overtime calculated?

it seems to me that the fairest way to figure it is $174 x 5 X 52 to get my annual, which would be $45240. i'll even agree to figuring it on an income of $48000.

any advice or knowledge? thank you.
 


seniorjudge

Senior Member
it seems to me that the fairest way to figure it is $174 x 5 X 52 to get my annual, which would be $45240. i'll even agree to figuring it on an income of $48000.
That certainly sounds reasonable to me BUT you're in LA and that's a whole 'nother world since y'all use civil law instead of common law.
 

CJane

Senior Member
Out of curiosity, why would you argue that the per diem SHOULDN'T be included as income that would normally be available to support the child?
 

mistoffolees

Senior Member
Out of curiosity, why would you argue that the per diem SHOULDN'T be included as income that would normally be available to support the child?
Because per diem is supposed to reimburse travel expenses? Money spent on hotels and meals while traveling is NOT available to support the child.

If the per diem is normal and meets IRS guidelines and if OP spends that amount, it will be treated as an expense reimbursement and not income. It would not therefore enter into the support calculation.

HOWEVER, if the per diem is higher than actual expenses, the difference would probably be considered income. That is, if you receive $30,000 in per diem over the course of a year and only spend $20,000 on actual travel expenses, the $10,000 difference is probably income.

As for overtime, it's not really an issue of overtime. What is the total amount of income? The court won't care if it's $40 K in base and $8 K in overtime or $20 K in base and $28 K in overtime. They're only going to be interested in the total income.
 

CJane

Senior Member
Because per diem is supposed to reimburse travel expenses? Money spent on hotels and meals while traveling is NOT available to support the child.
In LA, "reimbursement of travel expenses" for employment IS used as income for child support purposes.

LOUISIANA REVISED STATUTES
TITLE 9. CIVIL CODE ANCILLARIES
CODE BOOK I--OF PERSONS
CODE TITLE V--DIVORCE
CHAPTER 1. DIVORCE
PART I-A. CHILD SUPPORT
SUBPART A. GUIDELINES FOR DETERMINATION OF CHILD SUPPORT

315. Definitions

As used in this Part:

(4) "Gross income" means:

(a) The income from any source, including but not limited to salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, worker's compensation benefits, unemployment insurance benefits, disability insurance benefits, and spousal support received from a preexisting spousal support obligation;

(b) Expense reimbursement or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business, if the reimbursements or payments are significant and reduce the parent's personal living expenses. Such payments include but are not limited to a company car, free housing, or reimbursed meals; and



However:

(d) As used herein, "gross income" does not include:

(ii) Per diem allowances which are not subject to federal income taxation under the provisions of the Internal Revenue Code.



If the per diem is normal and meets IRS guidelines and if OP spends that amount, it will be treated as an expense reimbursement and not income. It would not therefore enter into the support calculation.
So, actually, if it is treated as expense reimbursement, it IS income. If it's REAL per diem, it's NOT treated as income.

HOWEVER, if the per diem is higher than actual expenses, the difference would probably be considered income. That is, if you receive $30,000 in per diem over the course of a year and only spend $20,000 on actual travel expenses, the $10,000 difference is probably income.
I don't think, according to the IRS, it matters AT ALL what the per diem is actually used FOR. It either qualifies or it doesn't. (Though LdiJ should probably weigh in here).
 

mistoffolees

Senior Member
So, actually, if it is treated as expense reimbursement, it IS income. If it's REAL per diem, it's NOT treated as income.



I don't think, according to the IRS, it matters AT ALL what the per diem is actually used FOR. It either qualifies or it doesn't. (Though LdiJ should probably weigh in here).
Actually, what you cited disagrees with that. Your own reference states that it's only income if "if the reimbursements or payments are significant and reduce the parent's personal living expenses. Such payments include but are not limited to a company car, free housing, or reimbursed meals; and"

There's nothing here that suggests that he's talking about anything of that nature. As stated, it is a daily rate which is to be used for hotels, meals, etc.

In fact the IRS rules specifically state that per diem expenses are not income as long as they don't exceed the published rates for the cities involved:
IRS Issues Guidance on Per Diem Expense Reimbursements

"Generally, amounts employers pay employees to reimburse them for substantiated business expenses aren't subject to income tax or employment tax. Per diem payments for meals and lodging that do not exceed the federal per diem rate for a particular city are deemed to be substantiated without accounting for actual expenses.

However, if an employer pays expense allowances that exceed the federal per diem rates, the excess amounts are subject to income tax and employment tax if they are not repaid to the employer, unless the employee actually substantiates all of the expenses covered by the per diem allowance."

So, my statement is not quite correct, but close. OP would have to look up the federal per diem rate for each city. If the amount given by the employer is less than the federal rate, the per diem is not taxable. if the amount given by the employer exceeds the federal rate, then the difference is taxable income. He doesn't need to track individual expenses.

A quick check shows that $151 is under the federal rate in most large cities, but not small towns. Even for the small towns, most of them are $140 or more, so even if OP is spending most of his time in small rural areas, the amount of income would be modest.

I don't know for sure that the same thing would apply in a divorce income calculation, but I'd sure as heck be pushing for it.
 
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LdiJ

Senior Member
In LA, "reimbursement of travel expenses" for employment IS used as income for child support purposes.

LOUISIANA REVISED STATUTES
TITLE 9. CIVIL CODE ANCILLARIES
CODE BOOK I--OF PERSONS
CODE TITLE V--DIVORCE
CHAPTER 1. DIVORCE
PART I-A. CHILD SUPPORT
SUBPART A. GUIDELINES FOR DETERMINATION OF CHILD SUPPORT

315. Definitions

As used in this Part:

(4) "Gross income" means:

(a) The income from any source, including but not limited to salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, worker's compensation benefits, unemployment insurance benefits, disability insurance benefits, and spousal support received from a preexisting spousal support obligation;

(b) Expense reimbursement or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business, if the reimbursements or payments are significant and reduce the parent's personal living expenses. Such payments include but are not limited to a company car, free housing, or reimbursed meals; and



However:

(d) As used herein, "gross income" does not include:

(ii) Per diem allowances which are not subject to federal income taxation under the provisions of the Internal Revenue Code.





So, actually, if it is treated as expense reimbursement, it IS income. If it's REAL per diem, it's NOT treated as income.



I don't think, according to the IRS, it matters AT ALL what the per diem is actually used FOR. It either qualifies or it doesn't. (Though LdiJ should probably weigh in here).
First, let me clarify what "per diem" really is.

This insurance adjuster's case is a good example.

He is likely traveling around the country or a region, handling disasters. Its up to his employers to cover his costs while doing so (hotels, 1/2 of meals, incidentals etc.). This would not be taxable income nor should be included in a child support calculation.

An employer has a choice of covering each expense, individually, having the employee draw up an expense report, and then getting on the employee's butt if the employee chooses a hotel that is too expensive or spends too much on any one individual meal. The other choice is to pay the government, preset "per diem" for those expenses, which allows the employee to decide how much or how little to spend on each item. So, if the employee likes really fancy meals, they may decide to stay a the local roach motel to save money on hotels, and spend more of their per diem on fancy meals and drinks. Or in the alternative, the employee may prefer a comfortable hotel, and to eat from the dollar menu at fast food places. Sometimes an employee will choose to profit on the deal by both staying at the local roach motel AND eating from dollar menus. However, most of the time the preset per diem rates really just barely cover average expenses.

Based on what the OP has described, he has a traditional "per diem" situation, and that money should not be taxable or included in child support.

However, when employer paid expenses CAN and should be included in child support, is when the employer is providing housing, a car, or other items for the employee that actually reduce their living expenses. So, if an employee is, for example, a ranch hand who lives on the ranch and is provided housing, utilities and food, the value of those is normally added back to income in determining child support.

However, they are often NOT added back into income for tax purposes, because they are often considered to be "for the convenience of the employer" and in that situation its not a taxable benefit.

However...there CAN be per diem situations that are taxable, or should be taxable. We had one on here not too long ago that was clearly fraud on the employer's part, and technically on the employees part too.

A classic one is where the company gives a per diem rate that is higher than the "CONUS" rate (the government set rate). In those instances the per diem must be included on the W2 as wages, and then the employee gets to deduct actual employee business expenses on Schedule A via form 2106.

That is the one that gets tricky for child support purposes. For all intents and purposes the W2 show wages being much higher than they actually are. If this OP's per diem is going to be showing up on his W2 and he will have to deduct actual expenses, then he could have a problem. However, I suspect that is not the case because his per diem rate seems in line with CONUS for his region.
 

nextwife

Senior Member
Out of curiosity, why would you argue that the per diem SHOULDN'T be included as income that would normally be available to support the child?

Because it's NOT "income" that is available to support the child, it is reimbursement for extra living costs incurred by thr employee who must partially live "on the road".


The per Diem is a compensation to the employee to OFFSET the extra, added living costs that the demands of the job add. An employee who must live on the road all week CAN'T sleep in their own bed, or eat out of their own refrigerator. They must pay for lodging and eat meals out. What they are spending is not money that is available to them to use for support. It is money they must SPEND for meals and lodging BECAUSE their employer needs them to be away from their home city.

I used to get an auto allowance BECAUSE I used my own car to run documents to the courthouse, attend closings all over four counties, call on customers all day, attend meetings and so on. The miles I put on my car were over and above what office based employees incurred, and the allowance was intended to be a REIMBURSEMENT for the added wear and tear on my car, and the added gas and insurance costs. It was not EXTRA money.
 

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