It is important for parties going through a divorce to understand what monies can be considered income under the child support guidelines used by the court. However, understanding what is or is not considered income is not simple or easy. There are many pitfalls and the calculation may be off by hundreds if not thousands of dollars, if you don’t have a skilled child support attorney to guide you.
California Family Code Section 4058,“Considers gross income that from any source except for child support payments that are actually received or public assistance programs where the eligibility for program assistance is based on need.”
The process of determining income begins when the divorce petition is first filed. Child support is one of the most important issues in a divorce case. Talk to an experienced child support attorney who is knowledgeable in how the support is calculated and can guide you through the entire process.
You ask, “What is income for support purposes”? By statute, income includes, but is not limited to:
- salaries and wages, including tips, bonuses, commissions, overtime pay
- rents from rental properties
- dividends, pensions, interest income, income from a trust or annuity
- workers compensation benefits
- unemployment insurance
- disability insurance benefits
- social security benefits and alimony (spousal support paid by someone other than the other parent) received from an unrelated case to the parent seeking child support
- SSI might not be considered income in some instances because it’s based on need
- recurring gifts
- lottery winnings (when taken as a lump sum) and gambling winnings count as income
When it comes to business owners, their income is typically the gross revenues of the business minus reasonable business expenses.
In addition, income includes other perks, such as the use of a company car, free housing and reimbursed expenses (expense account). But perks/employee benefits are not necessarily or automatically considered income: the court has discretion.
Is there any monies that aren’t used to determine income? Yes, but there are exceptions to each rule. Below are just a few examples of funds not considered income:
- student loans that are used for books and tuition are not considered income
- life insurance death benefits
- future speculative income
- stock when it cannot be liquidated or is received in connection with the sale of a business
- home equity
- personal injury proceeds (However, interest from invested proceeds are considered income)
- gifts of a non-monetary nature
- inheritance money
The determination of child support and what is and what is not income in a child support case can be very complicated.
If you have a child support matter, whether you are the one facing a child support award against you or seeking child support, you owe it to yourself to contact the experienced family attorneys in the law offices of Holstrom, Block & Parke.
We will guide you through your issues so you can focus on moving forward with your life. Contact us at one of our conveniently located offices in Orange, Riverside or San Bernardino Counties.