Divorcing couples and their attorneys generally strive to reach agreements on the issues to be hammered out, like child support, without having to take these matters before a judge. However, if the issue of child support payments needs to go to court, there are legal guidelines for judges to follow.
The income of both parents is one of the most important factors that judges consider in determining child support. That’s why it’s essential to understand what constitutes “income” under the law. It can go far beyond what you are paid by your employer.
Judges consider “gross income.” That includes salary or wages, overtime pay, bonuses and tips. It also includes additional funds that you get from your employer, including profit sharing, commissions and deferred compensation. If you are a contractor, your contractual agreements are considered.
People often have numerous sources of income apart from their work. That’s why gross income also includes interest, investment income, dividends, annuities and capital gains. If you are receiving rent, royalties or alimony from a previous spouse, that is all factored into your income calculation. Benefits from Social Security, the Veterans’ Administration and pension plans are considered as well.
Some perks may also be considered. For example, if your employer leases you a car or pays for an apartment for you in another city, that’s considered a form of income.
There’s another type of income called “unrealized income.” That’s income you’ve earned but not yet collected. This can includes earned interest on retirement accounts, stock options and retained earnings from a partnership, corporation or sole proprietorship.
Of course, both parties are required to accurately and completely report all of these sources of income. If you are the one seeking child support and you believe that your spouse is not being completely forthcoming, let your attorney know so that he or she can work to get you the support that you and your child(ren) need and deserve.
Source: FindLaw, “Child Support: Determining Parents’ Income,” accessed March 23, 2017