If you need assistance with your child support obligations, please call our office at (626) 683-8113 or contact us online. Our skilled Pasadena family law lawyers can handle various child support issues, including child support modifications and the payment of back child support.
What Happens If You Win the Lottery While Paying Child Support?
Everyone dreams of winning the lottery. But it's important for people going through a divorce to understand that lottery winnings can substantially impact their child support, estate plan, and alimony obligations. The case of the latest Powerball winner illustrated this.
A 44-year-old New Jersey resident, Pedro Quezada, recently won a $338 million Powerball jackpot. Quezada chose a lump sum payment of $221 million, of which he will bring home about $152 million after taxes. However, Quezada has five children and currently owes $29,000 in back child support.
Many people think a windfall like hitting the Powerball jackpot doesn't count as income for child support purposes because it's not earned in the traditional sense. However, several cases have established that lottery winnings count as income for determining child support, even if the winnings are taken as a single lump sum payment.
You don't even need to win a multi-million dollar jackpot for your gambling earnings to affect your child support payments. The IRS receives reports of $600 or more lottery winnings after the ticket cost is deducted. This income must be reported on your federal income tax return.
Child Support Deducted from Lottery Winnings
Child support arrears are automatically deducted from lottery winnings once taxes and tax liens have been satisfied. However, child support won't automatically be increased based on lottery winnings. The custodial parent must apply for a modification under "changed circumstances." The judge would use the status principle when determining if child support should be raised. This is the belief that children are entitled to share in the increase in status of their noncustodial parent because they would have received this benefit if their parents had remained married.
If you need a Pasadena child support lawyer to help you navigate California child support, call our experienced attorneys at Schweitzer Law Partners at (626) 683-8113. We can answer all of your questions and handle a variety of family law issues.