Star page 1*1 A mother and father separated in 2010 and agreed to a divorce in 2015. The father obtained sole legal and primary physical custody of the parties’ children. In 2021, the parents agreed to shared legal custody of their youngest child. Upon this modification, the court ordered both parents to provide evidence of their income for child support purposes. The father did not provide evidence of his income for several years and, when he finally did, asserted that he had negative income from his businesses. The court ordered the father to file proof of a “credible” income, so he refiled documents and asserted that he earned an annual income of $47,000. Based on that filing, the court found that the father made over $1 million when not counting depreciation deducted for tax purposes. The father moved for reconsideration and then for Civil Rule 60(b) relief. After the court ruled on each motion, he appealed. We affirm.

Jeremy Sidney and Amanda Bishop married in 1997 and separated in 2010. They have three children. Their youngest child is the subject of this child support dispute.

A 2015 divorce decree awarded Jeremy primary physical custody over the children. In February 2021, the parties agreed to a shared legal custody modification for the remaining minor child. The superior court confirmed this agreement in August 2021. To determine the new child support obligation, the superior court ordered the parties to complete and produce Court Form DR-305 — Child Support Guidelines Affidavits (hereinafter referred to as a “child support affidavit” or “affidavit”). This form document requires disclosure of party income along with deductions from income as allowed under Civil Rule 90.3.

Amanda filed her child support affidavit in September 2021. The superior court extended Jeremy's filing deadline to December 2021, but Jeremy did not then file an affidavit or any other income information. Instead, there was no action in the case until December 2023, when Amanda moved for Jeremy to submit his affidavit and the case was reassigned to a new judge.¹ The court granted Amanda's motion and ordered Jeremy to file his affidavit within ten days.

Jeremy filed a child support affidavit with supporting personal tax documentation from 2022. His affidavit claimed negative annual income of -$12,645. Jeremy also included portions of his tax return that identified his occupation as an electrician and plumber, and reported income from his ownership interests in a rental property and three businesses — West Glacier Development, LLC, Alaska Juneau Construction, and Jugs Crushing.

After review of Jeremy's affidavit, the superior court ordered him to supplement his financial documents. The superior court warned Jeremy that it did not find his claim of negative income credible. It notified him that the court “believes it has reason to calculate his income at the $126,000 cap set by rule.”² It explained that the court calculates income for the purpose of child support “differently than required by the Internal Revenue Service,” that “child support allows much narrower deductions than tax returns for businesses,” and that because he had already disclosed his gross receipts, he needed to explain or show “ordinary and necessary expenses.”

Star page 2*2 Jeremy hired an attorney and filed a new child support affidavit as ordered. The new affidavit disclosed $1,883,729.50 in total income with $1,836,902.40 in deductions, for a net income of $46,827.10. Jeremy's affidavit attached a summary table accounting for his business income and expenses, and other tables showing income and expenses for each business. The accompanying table listed $1,824,205 in business expenses, while Jeremy's affidavit deducted an additional $12,697.40 for federal, state, local, and social security or self-employment taxes. Jeremy filed supporting tax returns the following day with the court, including tax forms pertaining to the rental property and businesses.

Amanda also filed a new child support affidavit. Amanda's filing with supportive paystubs indicated an income of $64,141 after taking Civil Rule 90.3 deductions. One of these deductions claimed $3,715.20 in “health insurance premiums for parent.”

Jeremy objected to several aspects of Amanda's filing. Relevant to this appeal, Jeremy argued that Amanda's claim for healthcare deductions from her income included all of the members of her household, but that only the costs for herself and their minor child should be included as a deduction. Based on his review of Amanda's filing, Jeremy filed a new child support affidavit which claimed different numbers for some of Amanda's Civil Rule 90.3 deductions and added a health insurance deduction to his own income. Jeremy credited Amanda with slightly greater tax deductions but asserted that Amanda could only claim $1,232.74 in health insurance premiums. Jeremy calculated Amanda's income for purposes of calculating child support at $66,201.14 and his own income at $46,219.10.

The superior court entered the first interim child support order in August 2024. The court did not accept Jeremy's contention that he earned $46,219.10. Instead, the court found that “[Jeremy] deducted $1,071,822 in depreciation from his federal tax returns for 2023. Depreciation costs are not listed as an acceptable deduction under Civil Rule 90.3(a)(1).” Accordingly, the court added the depreciation that Jeremy claimed on a tax form to his net annual income, concluding that he earned just over $1.1 million a year. The court then stated it calculated Jeremy's income at the income cap applicable as of the date of the parties’ 2021 settlement agreement. The order indicated that Jeremy's annual income resulted in a $7,047 basic monthly obligation.

The first interim support order also discussed Jeremy's argument about health insurance. It reasoned that Jeremy had failed to show that Amanda's claimed health insurance expenses for the child also applied to other family members. It therefore accepted Amanda's assertion that she paid $310 a month for their child's healthcare and added half of this amount ($155) to Jeremy's monthly support obligation. But the court did not actually address Jeremy's argument that Amanda improperly deducted insurance premiums for the entire family from her annual income. Nevertheless, the order accepted Jeremy's argument when it set Amanda's income at $66,201.14 — the amount Jeremy argued Amanda earned after deducting his proffered health insurance premium. Thus, the court set Jeremy's total monthly support obligation at $7,202. This included the addition of $310 for the child's health insurance less the $155 adjustment for the cost of the child's healthcare paid for by Amanda.

Jeremy moved for reconsideration. He argued that the court erred by deviating from the income cap and by finding that he included depreciation in his income deductions. He also argued that the monthly amount of child support — $7,202 — was well in excess of the applicable monthly cap. In support of this motion, he filed “Exhibit D,” which included the same tables previously provided with his second child support affidavit; these listed Jeremy's business income and deductions.

Star page 3*3 Before the court ruled on his motion for reconsideration, Jeremy filed a Civil Rule 60(b) motion for relief from the child support order. He argued that because Amanda sought to include the cost of health care as a deduction from income, the court erroneously allowed Amanda to deduct healthcare premiums from her income “without including documentation that her new spouse and his children are not listed on the policy.” Jeremy made a new argument that Amanda could not claim credit for their child's healthcare expenses because the child received free healthcare from the Indian Health Service. And Jeremy reiterated his argument that the court erred by finding he included depreciation in his business expenses, contending that the court had overstated his income.

In October 2024, the court granted reconsideration of the calculation of child support based on the statutory cap. The court deemed the calculation a “computing error,” noting it had calculated child support based on adjusted income and not the statutory cap. The corrected order capped Jeremy's income at $126,000 and set his basic monthly obligation at $773. The court added an adjustment for the parties to each pay $155 per month for the child's health insurance premium. Jeremy's total monthly support obligation was set at $928 per month.

The court deferred ruling on the Civil Rule 60(b) motion until March 2025. There, it agreed with Jeremy that he did not have to pay the $155 healthcare premium because the parties’ child was eligible for care through the Indian Health Service. Because the court granted this Rule 60(b) relief, it “decline[d] to address the issue of whether [Amanda] ha[d] rebutted the presumption that her health insurance premium included coverage for her other family members.”

Addressing its calculation that Jeremy earned $1.1 million in annual income, the court explained that Alaska Civil Rule 90.3 does not allow deductions for depreciation. It also wrote that the expenses listed in Exhibit D provided “insufficient” information to determine if they qualified as “ordinary and necessary costs” for self-employment child support income calculations. The court stated it would not consider these deductions.

The court issued a “Second Corrected Child Support Order” that maintained Jeremy's calculated income of $1,118,041.10. Despite the court's statement that it would not consider the expenses listed in Exhibit D, the court calculated this income by adding the depreciation expense listed on the IRS form for one business to Jeremy's affidavit-reported income of $46,219.10. This reported income still included Jeremy's other business expense deductions. The second corrected support order also maintained Amanda's income of $66,201.14 and set Jeremy's total monthly child support obligation at $773 per month; this amount did not include any insurance premium.

Jeremy appeals this final child support order.

“We will ‘reverse child support awards only if the superior court abused its discretion, applied an incorrect legal standard, or clearly erred in its factual findings.’ We ‘review the superior court's factual findings regarding a party's income for purposes of calculating child support for clear error.’ ”³

“Given the broad definition of income in Alaska Civil Rule 90.3(a)(1), the superior court has discretion in deciding whether certain funds should be included in income for Civil Rule 90.3 purposes. We therefore review for abuse of discretion the superior court's decision to disallow ... claimed business losses.”⁴

Star page 4*4 We “will not disturb a trial court's ruling on a Rule 60(b) motion unless an abuse of discretion is demonstrated. We will find an abuse of discretion [in this context] when the decision on review is manifestly unreasonable.”⁵ We review the underlying Civil Rule 60(b) fact findings for clear error.⁶

Jeremy contends that the court should not have applied the income cap to his calculated income, and that Amanda's calculated income was incorrect. He argues first that his income was overstated because the court added depreciation expense and did not deduct business expenses. He also argues that health insurance should not have been included in the calculation of Amanda's income. Amanda asks us to affirm.

Jeremy argues that the net expenses he included on his child support affidavit did not include a depreciation deduction. He contends that because the deductions did not include depreciation expense, his income was erroneously overstated when depreciation from his tax return was added to the net income he disclosed on his child support affidavit.

Jeremy's amended child support affidavit reported gross wages or salary of $1,883,729.50. This was the amount identified in Exhibit D, his itemized summary of his businesses’ income and expenses. His affidavit then claimed $1,838,822.40 in total deductions. These deductions consisted of the $1,824,205 in business expenses listed in Exhibit D, $12,697.40 for personal taxes, and $1,920 for health insurance premium expenses. In total, Jeremy contended his adjusted allowable income was $46,219.10. Amanda asserted that Jeremy's adjusted allowable income was $88,875.15. The court adopted neither of these figures. Instead, the court set Jeremy's adjusted allowable income at $1,118,041.10. The court explained that it calculated this amount by adding depreciation expenses that Jeremy claimed on his tax return to the income reported in his child support affidavit. The court thus added $1,071,822, the amount Jeremy claimed as a depreciation expense on the tax form for one of his businesses.

Jeremy is correct that he did not include depreciation as a business expense deduction from his income for child support purposes. Exhibit D lists numerous business expenses like “wages,” “insurance,” and “utilities,” but depreciation is not one of them. Therefore, it was error to add depreciation from the business's tax return to Jeremy's claimed income on the affidavit. Nonetheless, “[w]e may affirm the superior court on any basis supported by the record, even if that basis was not considered by the court below or advanced by any party.”⁷ Although Jeremy did not deduct depreciation expense from his income, he did double count other business expense deductions. After adjusting for the double counting in Jeremy's calculation, we see no error in the application of the statutory income cap.

Star page 5*5 Jeremy claims four business concerns which we group into two categories: a commercial building that he owns with his wife⁸ and three separate businesses in which he claims a 50% partnership interest. For the building, Jeremy claimed gross receipts of $130,111, offset by expenses of $39,954, for a net income of $90,157.

Annual gross business receipts for the other businesses totaled $6,532,549.⁹ Jeremy reduced these gross receipts by $3,025,312 for costs of goods sold. Jeremy then claimed $3,568,502 in deductions for other business expenses; these deductions did not include depreciation. This results in a net loss of $61,265, i.e., gross receipts ($6,532,549) less cost of goods sold ($3,025,312) and less other deductions ($3,568,502). Jeremy's 50% share of this loss is $30,632.50. Thus, combined with his earnings from the building, Jeremy claimed $59,524.50 as income from his commercial ventures. Jeremy further reduced this business income for deductions for taxes and other costs, resulting in a final adjusted income of $46,219.10 on Jeremy's child support affidavit.

But Jeremy made a curious and significant error in his calculation for the court. He counted certain expense deductions twice: once under the cost of goods sold category, and again as separate business expenses. For one company, he calculated gross profit by taking gross receipts and deducting the cost of goods sold in the amount of $2,979,402. As explained in Statement 4 attached to Form 1125-A of his federal taxes (although not in his exhibit for the court), the cost of goods sold included “other costs” for tools, blasting, equipment rentals, and fuel totaling $917,703. For child support purposes, after subtracting this cost of goods sold from the business income, Jeremy made additional deductions, and those deductions included the same amount ($917,703) for the same items (tools, blasting, equipment rentals, fuel).¹⁰ This means that Jeremy deducted these costs twice and understated his income by the double-counted expenses. Adjusting for Jeremy's 50% share, this means that Jeremy's affidavit understated his income by $458,851.50.

The record reflects that Jeremy earns at least $505,070.60 per year.¹¹ This is still well over the $126,000 income cap that the court ultimately used. Thus, even though it was error to add depreciation expense to Jeremy's claimed income, the error was harmless. We affirm the court's application of the income cap for Jeremy's child support obligation.

Star page 6*6 Quoting the court's Civil Rule 60(b) order, Jeremy argues that the court erred by disallowing his business expenses in their entirety. He claims that the court failed to consider whether his business expenses were ordinary and necessary to produce income. In its Civil Rule 60(b) order, the court did say that the information in Exhibit D was “insufficient” for the court to decide whether the expenses were “ordinary and necessary costs.” The court said that it would not consider those expenses. However, despite this language, the court actually did allow all of Jeremy's claimed business expenses.

The final child support order totals Jeremy's income at $1,118,041.10. As explained in the support order, “[t]he court based the adjusted annual income figures off [Jeremy's child support affidavit], but added back into that his deduction for depreciation costs, a figure of $1,071,822 (see IRS form 1065 from 2023).” Thus, the court added depreciation to Jeremy's affidavit-reported income of $46,219.10. But Jeremy's reported income on the affidavit included his business deductions, so when it relied on that reported income, the court nonetheless accepted his business expense deductions.¹² Therefore, despite its language stating otherwise, the court allowed Jeremy's business expenses in their entirety. We see no error on this basis.

Jeremy argues that the superior court erred by allowing Amanda to deduct healthcare premium costs for her entire family from her income without overcoming the “presumption” from Rusenstrom v. Rusenstrom.¹³ He contends that Amanda included other family members in her health insurance premium deduction and failed to prove her individual health insurance costs.

A parent can deduct health insurance premiums from the parent's reported income, but the parent can only include premiums paid “by the parent and for the parent only.”¹⁴ Despite language in the Civil Rule 60(b) order suggesting that the court had not considered Jeremy's healthcare premium argument, the court found in his favor on this issue. The final support order used the income that Jeremy attributed to Amanda with his proffered health insurance premium deduction. By adopting the amount that Jeremy claimed Amanda could deduct, the court accepted Jeremy's calculation using of Amanda's individual (not family) healthcare premiums. Jeremy prevailed on this issue and is entitled to no further relief.

Finally, Jeremy reiterates an argument he made against the court's initial orders requiring him to pay for half of the child's healthcare expenses.¹⁵ To the extent that Jeremy challenges this decision, that challenge is also misplaced. The court corrected the child support order to remove the health care credit because the child was eligible for care through the Indian Health Service.

We conclude that the superior court did not clearly err in its final calculation of healthcare expenses nor abuse its discretion in allowing their deduction.

Star page 7*7 We AFFIRM the superior court's final child support order setting Jeremy's obligation at $773 per month.