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Imputed Income for Child Support Determinations


Imputed Income for Child Support Determinations


In calculating how much child support should be paid to the custodial parent of a child, a count may consider not only how much money a parent is earning at the time of the hearing, but also certain other income and benefits, which the noncustodial parent routinely received during the months and years prior to the date the court makes its determination.


Imputed Income


All too often, where there is a dispute as to custody and child support, a parent who has worked many hours of overtime over the previous years, or worked two jobs, or earned a high salary will suddenly no longer have overtime available, will quit the second job, or will work for a reduced salary, contending that the business can no longer provide overtime or support the higher pay. When the allegations are not credible and not supported evidence, the court will impute the alleged loss of income to the parent and will calculate the child support obligation on the amount the parent had earned in the past. Where a parent has lost a high paying job and is unwilling to take just any job while seeking a comparable high paying job, the court can impute a reasonable sum as earnings. Where a parent has given up his steady employment in order to open up his own business, the court will treat that parent as if he still held the steady job and impute the earnings of the steady job to the parent.


In-Kind Income


In some jobs, the wage earner may receive benefits that may be treated as income in calculating child support. A wage earner that has the full time use of a car, with the gas paid for by the employer, may have the lease value of the car and the cost of gasoline imputed to him as income. Free food at breakfast and lunch, supplied by the employer on a regular basis or a subsidy for clothing may be considered as income by a court. If the employer pays for car insurance or the cell phone or any other expense that the average person must pay for out of his or her earnings, a court may impute the value of such payments as income.


Self-Employment Expenses


A person who is self-employed is able to deduct from his or her income taxes expenses used to produce that income. If a person works out of his home, he may deduct his home phone, the cost to clean the house or maintain the yard in order to determine the amount of income earned for self-employment purposes. To some extent, those expenses are the same that the average person is required to pay without a tax deduction. While these expenses are deductible for tax purposes, a court may add them back in when determining the amount of self-employment earnings.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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