The starting point for the calculation of child support is the previous year’s tax returns. However, there are other factors which may lead the Court to enhance or adjust income when determining the proper amount of child support. For instance, Courts will look to your most recent pay stubs or your year to date income. The reason the Court will consider this year’s income is that there may be a dramatic change in earnings since the filing of your latest tax return. It is easy to foresee two quick examples where using the last tax return will provide a child support award that is inadequate or unjustified. First, if you unexpectedly lose your job after your tax return has been filed. Clearly the award based on employment that you no longer have will be unduly burdensome to which you are set up to fail and be held in contempt of a court order, which carries with it the possibility of jail time. The opposite is also true, if you receive a significant pay raise after your taxes are filed then you may not be paying enough.
When calculating child support the Court will also investigate whether the non-custodial parent receives a bonus. Such bonuses may be reflected on pay stubs or in an employment contract. The Court will include these bonuses to the child support calculation. Just some of the other factors the Court will consider are: (1) investment income; (2) workers’ compensation benefits; (3) disability benefits; (4) veteran’s benefits; (5) pension and retirement benefits; (6) fellowships and stipends; and (7) annuity payments.
Additionally, the Court will consider the lifestyle of the child prior to commencement as it will attempt to maintain as close a lifestyle of the child as possible.
Imputation of income: The Court will look into the facts and circumstances of a loss of employment to determine if it was involuntarily in order to avoid a proper order of support. If you purposefully lost your job, i.e. you quit or you took another job to lower your income and thus lower your child support payments, the Court may impute income to you in order to make up the difference in what your proper support obligation should be. In other words, if your salary was $150,000.00, but now only earn $65,000.00, the Court may disregard the $65,000.00 salary and order a child support award based on income of $150,000.00. This also comes into play when the non-custodial parent owns his/her own business and the tax returns do not adequately reflect the party’s true income for child support calculations. In this instance, the Court will also consider the lifestyle of the parties during the marriage and award child support at its discretion. However, if you lost your job through no fault of your own the Court will also take that into consideration when calculating child support.
In sum, do not attempt to thwart your true child support obligation, for the Court will notice and award you according to what you previously earned or what you should be earning.