How is child support calculated for a self-employed parent in Texas?

Q: How is child support calculated for a self-employed parent in Texas?

For a self-employed parent, Texas uses net self-employment income — gross receipts minus ordinary and necessary business expenses — and adds back depreciation and personal expenses run through the business.

Texas Child Support When a Parent Is Self-Employed

Written and kept current by Donald C. Nemec, a Texas family-law attorney (State Bar of Texas No. 24049967) with 18 years in Texas courts. Last reviewed against the Texas Family Code on May 16, 2026.

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Child support is straightforward when a parent has a W-2. It gets harder when a parent owns a business, works on 1099 contracts, or earns cash. Texas Family Code § 154.065 addresses self-employment income directly.

Net self-employment income

For a self-employed parent, the starting point is gross business receipts minus ordinary and necessary business expenses. That net figure goes into the net resources calculation like any other income.

Add-backs: expenses the law puts back

Texas does not accept every deduction a tax return claims. Two categories are commonly added back:

Depreciation — a paper deduction on the tax return that doesn't reduce real cash flow;
Personal expenses run through the business — a vehicle, phone, meals, travel, or a "salary" to a relative that is really personal spending.

The question is whether an expense is genuinely necessary to produce income. If it isn't, the court can treat it as income available for child support.

Cash income and underreporting

When income is paid in cash or underreported, courts can look at lifestyle evidence — housing, vehicles, travel, and spending — and at bank deposits to estimate true income. A parent who is intentionally underemployed can have income imputed based on earning potential.

Practical tips

Keep clean books — separate business and personal accounts.
Expect tax returns, 1099s, profit-and-loss statements, and bank statements to be requested in discovery.
An estimate from a child support calculator is a starting point; a contested self-employment case usually needs an attorney and sometimes a forensic accountant.

Frequently asked questions

Are business losses subtracted from child support income? Only legitimate ones. A court can disregard losses it finds were created to lower a support obligation.

What if the other parent hides income? Discovery tools — subpoenas, depositions, and document requests — exist to uncover it. This is where having a lawyer matters most.

This is general information, not legal advice. Self-employment child support cases are fact-intensive. For help, contact Nemec Law Office, serving Tarrant, Dallas, Denton, and Collin counties.