Income and How it Impacts Child Support and Alimony Orders

  • By:Karpenski & Schmelkin

When parents are divorcing, child support and alimony are often at the forefront of the discussions. While it is true that current income is a factor that can determine alimony and child support, current income isn’t the only determining factor. Imputation of Income or Attribution of Income may enter into the discussions. Here’s some information that will help you understand how imputation of income or attribution of income factors into child support and alimony:

What is Income?

With some exceptions, income is defined as gross income from any source, regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service, Department of Revenue or other taxing authority.

During a divorce a parent may deliberately get fired, laid off, or get a lower paying job in order to increase the amount of support received or to decrease the amount of support s/he is required to pay.   A parent may likewise fail to properly disclose all of her/his income. The latter is particularly problematic with self-employed parents.

Earning Capacity

If a parent has undocumented or unreported income, the Court may impute income to that parent based on evidence of that parent’s ownership and maintenance of assets, that parent’s lifestyle, expenses and spending patterns. If the Court finds that a parent has unreported income, it may adjust the amount of that parent’s income upward.

If a party is capable of working and is unemployed or underemployed, the Court may find that s/he is earning less than s/he could earn through reasonable efforts, In this instance the Court may consider potential earning capacity rather than actual earnings when make a support order.

Divorcing parents who are eligible for child support and/or alimony need to understand that income, imputation of income, and attribution of income are some of the factors that are considered. Please contact Karpenski & Schmelkin for more information on how these issues can impact you and for other assistance with your divorce.

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Posted in: Child Support