Whenever a court needs to determine an appropriate child support award, the primary factor it will consider is income. But what exactly is income? Pursuant to federal law, a non-custodial parent’s “gross income” for purposes of calculating child support must consider all sources of income and earnings. Income is viewed expansively when determining child support. In fact, the child support guidelines may even go so far as to include “unrealized income,” meaning income that exists on paper, but has not yet been realized, such as interest earned on an IRA account.
What Is Gross Income?
Gross income includes money the non-custodial parent receives from any source. Some common sources of income include:
- This includes tips, overtime, commissions, holiday bonuses, profit sharing accounts, deferred compensation, royalties, and severance pay.
- Moonlighting wages. If you have a second job, this is also considered in calculating your gross income. This includes rent if you own property, and income from other forms of self-employment.
- Interest income. If you have significant investments, any interest you earn will be factored into the custodial parent’s child support award. Dividends from securities are also included.
- Recurring capital gains.
- Pension income and Social Security benefits.
- Veterans’ benefits.
- Workers’ Compensation benefits, disability benefits, and unemployment earnings.
- Strike pay.
- Military fringe benefits, National Guard income and/or reserve drill income.
- Annuity payments.
- Lottery winnings, gambling winnings, gifts, and prizes. Any sort of windfall will be factored into your gross income.
- Educational grants, such as fellowships, stipends, or subsidies.
- If the non-custodial parent remarries, income the new spouse earns may under certain circumstances be considered, because it has the effect of reducing household expenses for the non-custodial parent.
- Alimony from prior spouses, excluding the spouse in the case where child support is at issue.
- Employment “perks.” Use of a company car, housing, or reimbursed expenses are considered gross income to the extent that they reduce a non-custodial parents’ personal living expenses.
What Is “Unrealized Income?”
Unrealized income is income that has not matured yet. It is income that you may have on paper, but do not have access to at the present time. For example, income earned on an IRA account that is reinvested back into the IRA, not to be cashed out until retirement. Different states have different approaches to addressing such unrealized income. To understand your or your ex-spouse’s financial obligations, it is critical that you speak with a knowledgeable Towson child support lawyer.
Other forms of unrealized income include trust income, capital gains from stock transactions, unrealized gains from unexercised stock options, and retained earnings of a corporation, partnership, or sole proprietorship.
Towson Child Support Lawyers at Huesman, Jones & Miles, LLC Provide Outstanding Representation in Child Support Matters
If you are seeking child support in Maryland, the experienced Towson child support lawyers at Huesman, Jones & Miles, LLC can help with drafting, modifying or enforcing child support agreements. We know how to determine the appropriate amount of child support by taking all sources of income into consideration. To schedule a free consultation, call us at 443-589-0150 or complete our online contact form. We proudly serve clients in Baltimore County, Carroll County, Harford County, and Howard County, including the communities of Baltimore, Towson, Essex, Pikesville, Hunt Valley, Columbia, and Bel Air.