Kansas Tax Adjustments: Dependent Exemptions and the CTC (Child Tax Credit) (REVISED)

Tax Return

Since January 1st, 2018, the most frequent question we get on the tech support line has to do with tax adjustments. The TCJA (Tax Cut and Jobs Act) of 2018 has created quite a bit of confusion on how the Kansas Child Support Calculator should create the suggested tax adjustment value.

We’ve written about this previously in several blogs but let’s take a moment to present an updated picture of just how the ITC adjustment suggestion works with respect to two of the four parts of the ITC adjustment calculation.

Remember that your Bradley Child Support Calculator suggests an Income Tax Considerations adjustment based on current (2018) tax law, not 2017 or some earlier taxes.

Dependent Exemptions

The Federal dependent exemption was abolished by the TCJA starting in 2018. However, KS tax law has not been changed for the Kansas dependent exemption, so the current KS tax rules still allow a dependent exemption. The Tax Results created by the Bradley Child Support Calculator report clearly shows the abolished Federal dependent exemption in a green highlighted area:


The dependent exemption used in the suggested Income Tax Adjustment i2018-07-BlogPic2s the portion circled in RED in the example above. The dependent exemption values are directly linked to the “Tax Deduction To” input on the Children page of the program and allocated to the parent you select.

The CTC (Child Tax Credit)

The TCJA increased the Child Tax Credit to $2000 per child from the $1000 previous value. There were also limits placed on the income applicability of this credit. For a parent who files married filing joint, the credit is fully applicable up to an adjusted gross income of $400,000 (AGI – shown on IRS form 1040 line 38).

From $400,001 to $440,000 there is a phase out of the credit. Above $440,000 the credit is fully phased out and not available to that parent. If the parent files with any other status, then the credit is fully applicable up to $200,000, but from $200,001 to $240,000 the credit is fully phased out. Above $240,000 the credit is not available to that parent.

Keep in mind that the CTC is available only for qualified children.  For CTC purposes, this will usually mean that the child must be related to the taxpayer in one of several ways (son, daughter, grandchild, etc.), must live in the taxpayer’s home more than half the year, must not provide more than half of his or her own support, and be 16 or younger at the end of the tax year.

The Bradley Child Support Calculator program will look at the entry for “Tax Deduction To” on the children page to determine which parent can take the CTC. Normally only the custodial parent can receive this credit, but there is a special rule for divorced parents. Using IRS form 8332, the custodial parent can waive their right to claim the CTC in favor of the non-custodial parent for one or more tax years.

Under the TCJA, which abolished the Personal Exemption for dependents, there is some confusion as to whether IRS Form 8332 is still applicable to the CTC, so even though the Child Support Calculator recognizes that it may be, and you may show the CTC tax deduction as allocated to the non-custodial parent on the Children page (and the Calculator’s suggestion for the ITC value is based on the entries you make in the “Tax Deduction To”), you may wish to consult with your tax advisor as to new revisions to the Form 8332 instructions in deciding whether to make that allocation.

Finally, in addition to the updated CTC there is a new credit introduced by the TCJA – commonly referred to as the “Family Credit.” This $500 credit is available for each dependent who is not a “qualified child” for CTC purposes (age 16 or younger at the end of the tax year), but who are qualified dependents of the parent with whom they reside. This credit added to the CTC, and shown as the “family credit” value on the Income Tax Considerations Adjustment Detail report.

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New Updates Posted for Kansas Child Support Calculator

New Updates Based on Tax Cuts and Jobs Act (TCJA) Posted for Kansas Child Support Calculator - Bradley Software & Child Support Tools

As discussed in a previous article in January, we’ve been working hard on updating our calculators based on the tax changes caused by the Tax Cuts and Jobs Act (TCJA). Today we’re excited to announce the updates for our Kansas child support calculator have been published and are ready for you to use! The other calculators we offer through Bradley Software and Child Support Tools were unaffected, so none of them require updates at this time.

All of our programs automatically check for updates, so while there’s nothing you need to do before using the updated calculator, we wanted to take this opportunity to walk you through what changed, what didn’t, and why. Continue reading

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2018 Tax Impacts on Child Support & Software Updates


Some of our subscribers have asked when we will be able to issue updated software reflecting the latest federal tax revisions caused by the Tax Cuts and Jobs Act (TCJA). We are working hard on these updates as we speak, but unfortunately it’s going to take a bit longer. To help explain why, we wanted to take a moment to walk you through some of the anticipated impacts the TCJA will have on child support and what this means for our child support calculators. Continue reading

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2018 Tax Update – TCJA

accountant-accounting-adviser-advisor-159804.jpegThe 2018 Tax Cut and Jobs Act enacted in mid December by Congress certainly presents a mixed bag of benefits for American families.

For example, while raising the standard deduction to $24,000 for married taxpayers ($12,000 for single), Congress deleted the $4,150 personal exemption. So a family of four (mom plus 3 kids) loses $16,600 in personal exemptions in order to gain $3,000 (Child Tax Credit increase of $1,000 per child under 17) plus $5,700 (standard deduction increase ); a net loss of $7,900 (16,600-8,700)

While many of the tax impacts are becoming more clear, the effect on child support amounts is not necessarily so obvious.

Kansas child support schedules are based on gross income from all sources, but the support schedule amounts are calculated on after-tax income. With the changes in tax rates, it appears it will be necessary for the Advisory Committee to recompile the support tables for approval as a part of new child support guideline recommendations to the Kansas Supreme Court.

As the impact of the Tax Cuts and Jobs Act on the Kansas child support calculations is better understood, appropriate updates will be issued.

In the interim, we will continue to use the most recently published child support schedules; as presently found in Administrative Order 287. We will also be updating some of the standard reports, to reflect changes like the Child Tax Credit and the Personal Exemption.

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Updates Posted for Kansas, Missouri, ArrearsMaster®, and Bradley ParentingTime®

Updates for the following programs were issued on July 7th, 2017.

  • Kansas Child Support Calculator
    This update includes changes to tax calculations as a result of the Legislature’s override of the Governor’s veto of the legislation reversing the small business taxation revisions of 2012 that has restored income taxation of LLCs, Sole Proprietorships, Partnership, many farms and “Mom and Pop” businesses, effective July 1, 2017.
    The update also includes the latest Interstate Payroll Adjustment data from the Bureau of Labor Statistics.


  • Missouri Child Support Calculator
    In Missouri, completely new items include a low income support calculation, as well as revisions to the Basic Child Support table became mandatory July 1, 2017.


  • ArrearsMaster® Calculator
    This is a regular update of interest rates in each state. In particular it updates the Kansas rate effective July 1, 2017 to 5.75%, up 0.75% from 2016.


  • Bradley ParentingTime® Calculator
    An exciting new feature has been released in this version, the Annual Hourly Calendar. This new calendar adds the ability to create a calendar for an entire year and determine custody percentage on an hourly basis. It includes holidays and a number of new reports.
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Kansas Cover Page Changes

In our ongoing effort to improve the Bradley Child Support Calculator for Kansas, we’ve redesigned the Cover (Summary) page. Although not a required form, it can be a handy reference for your file, your client, or the judge!  

The Cover page contains a lot of information on a single page – details of children’s residency, parent’s maintenance and expense obligations, and parenting time sharing.  It also details the income tax considerations adjustment and support amounts. It covers sole residency, shared residency and divided residency. 

We hope the expanded information will make understanding the sometimes complex child support calculation and custodial arrangements easier.

Posted in Child Support, Child Support Guidelines, Family Law, Uncategorized

Electronic Filing Expands in Kansas Courts

E FileChief Justice Lawton Nuss recently reported “In May, our district courts surpassed the 1-million mark for documents processed that were filed electronically.”

All state courts in Kansas are now able to receive electronically filed court documents (but only from Kansas attorneys).

Lawyers in good standing who are licensed in Kansas may electronically file in any state court. Self-represented parties who are not lawyers must still file paper documents in all courts.

Currently, electronic filing is required in the Supreme Court and Court of Appeals, as well as in 12 district courts covering 45 counties. The remaining district courts accept electronic filing but currently do not require it. More are expected to make electronic filing mandatory in coming months.

District courts that require electronic filing are:

  • 2nd:   Jackson, Jefferson, Pottawatomie and Wabaunsee counties
  • 6th:   Bourbon, Linn and Miami counties
  • 7th:   Douglas County
  • 8th:   Dickinson, Geary, Marion and Morris counties
  • 10th:   Johnson (which will accept PDF forms for eFiling)
  • 12th:   Cloud, Jewell, Lincoln, Mitchell, Republic and Washington counties
  • 16th:   Clark, Comanche, Ford, Gray, Kiowa and Meade counties
  • 21st:   Clay and Riley counties
  • 23rd:   Ellis, Gove, Rooks and Trego counties
  • 25th:   Finney, Greeley, Hamilton, Kearny, Scott and Wichita counties
  • 26th:   Grant, Haskell, Morton, Seward, Stanton and Stevens counties
  • 27th:   Reno County (civil only)
  • 28th:   Ottawa and Saline counties

Kansas district courts process more than 400,000 cases a year and the switch to electronic filing means court workers are no longer required to manage paper files. This reduces paper, mailing and file storage costs for both courts and lawyers.  It also reduces opportunities for error from misfiled documents or incorrect data entry.

For information on eFiling Bradley Software documents, click HERE to view EFILE the Bradley Kansas Child Support Worksheet.

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What Happened to the ITC (Income Tax Considerations) Adjustment??

40805168 - close up u.s. individual tax form 1040 with calculator and pen.Before 2012, Section A of Appendix V to the Kansas Child Support Guidelines simply said “If the parties share or alternate the exemption, Section A [the dependent’s exemption and the Federal Child Tax Credit] should not be used. Appendix V, Section A. Dependent’s Exemption and Child Tax Credit, CSG 2008, AO 216.

Before 2012, the examples in Section A of Appendix V also provided a mathematical formula to calculate the adjustment, if there was no sharing or alternating of the exemption(s):

The value of the exemption to the noncustodial parent may be calculated by multiplying the applicable exemption amount by the noncustodial parent’s applicable highest marginal rate at both the federal and Kansas levels. The combined federal and Kansas amount should be divided by 12 to arrive at the monthly amount. A portion of this amount would then be allocated to the noncustodial parent based upon his/her share of the combined income [emphasis added].

In 2012 however, Appendix V was redrafted to read

If the custodial parent agrees to alternate the exemption, the additional tax benefit to the noncustodial parent should be shared with the custodial parent equitably. If the noncustodial parent agrees to allow the custodial parent to claim the exemption in years that the noncustodial parent was entitled to the exemption [ed. note: the noncustodial parent is never “entitled” to the exemption unless the custodial parent consents in IRS Form 8332”], the additional tax benefit to the custodial parent should be shared with the noncustodial parent equitably. (emphasis added)

If the custodial parent elects not to alternate the income tax exemption for the minor child by executing IRS Form 8332 or a substantially similar form, the court shall consider the actual economic effect of the failure to alternate the exemption on the noncustodial parent and may adjust the noncustodial parent’s monthly child support accordingly.” Appendix, V Section A.1 – Dependent’s Exemption (emphasis added)


If the right to claim a qualifying child as a dependent is not shared between the parents, the monthly value of the tax credit should be included in the Income Tax Considerations adjustment. Appendix, V Section A.II – Federal Child Tax Credit

The mathematical formulaic approach set out in the pre-2012 Guidelines was eliminated by these new 2012 provisions, with the result that mathematically calculating a suggested ITC adjustment became impossible as a mathematical exercise.

Consider: “Multiply value A times value B” is a mathematical concept, whereas “shared equitablyor “adjusted accordingly” is not. The allocation of Income Tax Considerations adjustment thus becomes open to argument as to what is “equitable” or “fair.”

To be sure, the dollar amount of the economic tax benefit to each parent the TRV (Tax Reduction Value) is not hard to determine. The value remains (as it was before the 2012 revisions) “the applicable exemption amount [multiplied] by the noncustodial parent’s applicable highest marginal rate at both the federal and Kansas levels.”

(The TRV of each child as a dependent for either Mom or Dad can also quickly be determined by simply consulting the Tax Results report produced by the Bradley Kansas Child Support Calculator.™)

Things can get pretty complicated, however, if the right to claim a child as a tax dependent is alternated for future years, or is not limited to a single child, or where the family custodial arrangements are “creative.”

For example, in a given case, one could argue that if custodial parent Mom is allowed to claim Sarah (who would have a tax reduction value for Dad of $50.00 per month if he were allowed to claim her), while Dad is allowed to claim John (whose tax reduction value to Mom would be only $35.00 per month because Mom is in a lower tax bracket than Dad), it would be equitable to subtract the tax reduction value surrendered by custodial Mom for John ($35.00) from the tax reduction value denied to Dad for Sarah ($50.00) and view the Income Tax Considerations adjustment as having a value of $15.00 per month (reduction in Dad’s child support). In other words, the $50.00 benefit Dad could have realized had he claimed Sarah is offset by the $35.00 benefit he denied to Mom in claiming John, so the net tax reduction value lost by Dad is $15.00 per month – thus it is “equitable” to reduce Dad’s child support obligation to Mom by $15.00 per month.

What would be equitable, however, if Mom had denied Dad’s desire to claim John as his dependent, and offered to allow Dad to claim Sarah instead? Or should Mom’s refusal to allow Dad all of his requested parenting time with Sarah be considered? What about the children’s requests regarding custody arrangements? What of a teenager’s refusal to participate in parenting time to a degree that it affects a parent’s ability to claim the child as a dependent? What if Mom gets a “Head of Household” benefit for the children with her – should we reduce Dad’s child support by some percentage of the HOH benefit even if he has remarried and files a joint return with a new spouse (thus denying himself any HOH benefit)? The permutations are endless!

For the foregoing reasons, we are unable to suggest what the TRV of an alternated child should be.

For a simple, alternative approach, please see our blog item “Ignore the Alternated Child?”

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The Income Tax Considerations (ITC) Adjustment

6037112 - preparing taxes - concept suicideThe ITC adjustment is made up of four possible elements, some or all of which may be present in a particular case:

Income Tax Deduction. A portion of a tax payer’s income taxes can be saved through the ability to claim an additional exemption on the parent’s tax return for each dependent child. The value of the tax savings is equal to the reduction in the parent’s taxable income (the exemption value changes from year to year), multiplied by the parent’s income tax bracket. For example, if the exemption value is $4,050, and the parent’s income tax bracket is 25%, the tax savings is $4,050 x .25 = $1,012.50 per year or $84.38 per month for each child. A similar savings is available in the Kansas income tax. This ability to claim a child as an exemption can be transferred between the parents (or “alternated” from year to year).

Child Tax Credit. The Child Tax Credit permits additional Federal taxes to be saved if a dependent child is under the age of 17 at the end of the tax year. This is a “dollar for dollar” credit against the tax, not merely a reduction in taxable income The amount of the tax credit is $1,000 for each such child. THE CREDIT IS NOT RELATED TO THE PARENT’S INCOME TAX BRACKET. For example, the tax savings is $1,000 or $83.33 per month for each qualifying child REGARDLESS OF THE PARENT’S INCOME OR TAX BRACKET. The Child Tax Credit is, however, subject to a “phase-out” or reduction in the $1,000 credit for certain high income tax payers (beginning at $75,000 if the taxpayer files “Single,” $110,000 if the taxpayer files “Married filing Jointly”

Head of Household. The Federal and state taxes saved through reduced tax rates for a taxpayer who can file as “head of household.” The value of the tax savings is equal to the reduction in the parent’s taxes arising from the parent’s lower income tax bracket. For example, a taxpayer filing “single” with a taxable income of $50,000 pays taxes in the 25% Federal tax bracket; but if filing as “head of household” is in the 15% Federal tax bracket.

The “filing status” also affects the “standard deduction” amount – the reduction in Federal taxable income ($6,300 for the “single” filer; $9,300 for the head of household filer – a gain of $3,000); in Kansas the taxable income reduction is $2,500. Finally, a head of household filer in Kansas receives an additional exemption, which further reduces taxable income.

Note that a taxpayer can file “head of household” without claiming a dependent child. The fling requirement is simply that the taxpayer is unmarried at the end of the tax year, and provided a home for a qualifying person (child, stepchild, foster child, mother, father, sibling or other blood relative) for more than half of the year. Thus, for a divorced couple with two children, both parents can claim HOH status if one of the children spends one day more than half the year with each parent.

Standard Deduction. If, instead of itemizing deductible expenses, a parent elects to take the “Standard Deduction,” a tax savings is generated to the extent that the standard deduction exceeds the total deductible expenses which could have been itemized.

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2016 KS Bar Association Meeting

Kudos to the KS Bar Association for putting on a GREAT meeting this year in Wichita. We love attending these meetings where we meet so many of our customers and even meet some new friends along the way. The downtown Wichita area is such a nice place and the Hyatt was a great location for this meeting.

The staff at the KS Bar is to be commended for their hard work to put this together. We look forward to the meeting next year in Manhattan.

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