How Self-Employment or Business Income Affects Child Support in MN


One of the most complicated tasks in calculating child support involves computing income when one of the parents is self-employed. In these types of situations, a different formula is used to determine a parent’s income for child support purposes.

Income from self-employment or operation of a business, including joint ownership of a partnership or closely held corporation, is calculated under Minnesota law pursuant to the following formula:

gross receipts minus costs of goods sold minus ordinary and necessary expenses required for self-employment or business operation.

Specifically excluded from ordinary and necessary expenses are:

  • amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses;
  • investment tax credits;
  • or any other business expenses determined by the court to be inappropriate or excessive for determining gross income for purposes of calculating child support.

It is important to note that the person seeking to deduct an expense, including depreciation, has the burden of proving, if challenged, that the expense is ordinary and necessary.

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  • April Bower
    November 15, 2015, 11:37 pm

    I have a child support case with my 11 yr old daughters Father. He was court ordered to pay $238 a month, but 2 years ago he hurt his knee and couldn’t work. Amazingly, he is still able to hunt, fish, 4-wheel ride and go on vacations. The DHS put his Child Support obligation at $0 a month. In the meantime he owes thousands to me in arrears. Now he has the ok from the doctor to work again so they have been trying to get arrears from him. He will pay every 3-4 months to keep himself good from loosing his license. Why doesn’t the county catch on to this type of payment schedule he is showing? Why are they not thinking of the “Childs best interest?” I’m legally disabled and have been for 10 + years, but I still hold down a part time job to keep us a float. This just isn’t fair in my book!

  • Self Employed Tax Calculator
    November 29, 2012, 10:59 am

    One of the wise ways of starting your home based business is by using your skills. Many of the work from home business ideas are realized from the business owner’s skills. In case you have these skills or you can learn them, then you will make an extra income successfully from your home comfort.

  • Tracie Young
    September 12, 2012, 7:53 pm


    I have a child support case with my son’s father who is a master barber. He currently pays $384 per month (sporadically). I have taken him to court before but never receive much success. We together agreed on $300 per month when our son was born and I have only received the natural cost of living increases over the past 13 years. He has had other jobs which he didn’t report and he is lying about his income. My son and I are sick with lyme disease which virtually is leaving us with nothing due to the cost of medical care. The father is court ordered to pay half of all medical costs. This has not happened and I need help getting everything taken care of. I do not have a lot of money…I probably could do a retainer in November, but would appreciate some consideration in this matter. Any ideas or recomendations would be greatly appreciated.

    Thank you,

    Tracie Young