2025 Session Last amended: 2006 session

§ 518A.30 — Income From Self-employment or Operation of a Business

Plain-Language Summary

This section explains how income from self-employment or owning a business is calculated for child support purposes. It equals gross receipts minus the cost of goods sold minus ordinary and necessary business expenses.

518A.30 INCOME FROM SELF-EMPLOYMENT OR OPERATION OF A BUSINESS.

For purposes of section 518A.29, income from self-employment or operation of a business, including joint ownership of a partnership or closely held corporation, is defined as 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. The person seeking to deduct an expense, including depreciation, has the burden of proving, if challenged, that the expense is ordinary and necessary.

History:

2005 c 164 s 15,29; 1Sp2005 c 7 s 28; 2006 c 280 s 26

History: History: 2005 c 164 s 15,29; 1Sp2005 c 7 s 28; 2006 c 280 s 26

Practical Notes

When this applies: When a self-employed parent’s income must be determined for child support. Who this affects: Self-employed parents or business owners in child support cases. Key points: Not all tax deductions count as expenses for child support purposes. Accelerated depreciation and investment tax credits are specifically excluded. The parent claiming the business expense has the burden of proving it is ordinary and necessary if challenged.

Source: Minnesota Office of the Revisor of Statutes