What is Income for Child Support Purposes?

Next to child custody, child support is one of the issues parents worry about most in a divorce. The Maryland Child Support Guidelines calculate child support on an "income shares" model, which focuses on the relative incomes of the child's parents rather than the specific expenses of the child. Income, of course, can consist of more than what's listed on your paystubs. To calculate income for child support purposes, what types of income do the Maryland Child Support Guidelines take into account?

Understanding "Actual Monthly Income" and Maryland Child Support

The first thing a court needs in order to compute child support is to understand the family's custody arrangement. As a general rule, the parent who has primary physical custody of the child will receive child support from the other parent, though things may shake out differently if the custodial parent has a significantly higher income, or if the parents share physical custody, meaning each has the child for more than 127 overnights per year.

After ascertaining the custody arrangement, the court needs to consider the actual monthly income of each parent. Actual monthly income includes certain types of income and excludes others. Included for purposes of calculating child support are:

• Salary or wages
• Bonuses
• Commission
• Tips
• Rental income
• Business income
• Dividends
• Interest income
• Income from investments
• Distributions from trusts
• Distributions from annuities
• Income from self-employment
• Workers' compensation benefits
• Unemployment benefits
• Severance pay
• Disability benefits
• Spousal support (alimony)
• Social Security benefits
• Gifts, prizes, and lottery winnings
• Capital gains

While this list is extensive, it is not exhaustive. Means-tested government benefits such as Temporary Aid for Needy Families (TANF), Aid to Families with Dependent Children (AFDC), food stamps (SNAP), and Supplemental Security Income (SSI) are not included in actual monthly income.

After the court identifies actual monthly income, some amounts are deducted in order to arrive at each parent's adjusted actual income. If either parent pays alimony or pre-existing child support, those figures are subtracted from actual monthly income. Note that the parent must actually pay those amounts, not just be ordered to pay them.

Parents' adjusted actual incomes are then plugged into the Maryland Child Support Guidelines to determine the basic child support obligation; other factors, such as costs of health insurance, extraordinary medical expenses and work-related childcare are also taken into account in reaching the total child support obligation for the family.

Note that use of the child support guidelines is mandatory for calculating child support in Maryland, but only for families whose combined household income was less than $180,000 per year. Beginning July 1, 2022, the Maryland child support guidelines are updating the threshold for combined family income from $180,000 to $360,000. If the combined household income exceeded $15,000 per month, the court had the discretion to take other factors, such as child-related expenses, into account in calculating child support. After July 1, those numbers will double to $30,000 per month (or $360,000 per year). This should provide more prompt and predictable results for families earning between $180,000 and $360,000 per year. For families over the new threshold, the Court will have discretion in determining the level of child support.

What if One Parent Intentionally Reduces Their Income?

Unfortunately, some parents are more interested in dodging their child support obligations than in actually supporting their children. This may lead to a parent choosing to be unemployed or underemployed, or to working "under the table" and failing to report all of their earnings. Is there any recourse for the custodial parent, who might otherwise be penalized in child support calculations?

Fortunately, yes. There is a mechanism called "imputation of income." In essence, the court treats the underemployed parent as having a certain level of income, whether or not they do in fact. In order to impute income to a parent for child support purposes, the court must find that they are "voluntarily impoverished," and that they could work but simply choose not to.

Courts do not impute income to a parent simply because the other parent thinks they are not looking for a job or working as hard as they could. The court must be persuaded that the unemployed or underemployed parent's financial position is truly voluntary. Voluntary impoverishment may include refusing to look for a job, voluntarily quitting a job one already has, or working in a job that pays significantly less than one could reasonably be earning. Deliberately concealing financial assets or self-employment income can also lead to a finding of voluntary impoverishment.

Take Action if You Have Child Support Concerns

You may have suspicions or even knowledge about your soon-to-be ex's income, but you need to be able to prove it to the court. This is where the assistance of an experienced Maryland child support attorney is an important investment. The child support award the court makes is only as good as the information the court receives in order to perform a child support calculation; a knowledgeable attorney can make sure the court is not overestimating your income, or underestimating the other parent's.

The result of hiring the right attorney for your child support may be that you will pay less, or receive more, in child support every month for many years—something that can add up over time. Not only does an attorney's help improve your likelihood of success in a child support matter, but Maryland courts will also allow you to seek attorney's fees in pursuing your child support claim.

If you need to establish, enforce, or modify child support, especially if you suspect your child's other parent has not provided accurate income information, we invite you to contact our law office to schedule a confidential office consultation. We look forward to working with you to ensure that your child's needs are adequately provided for and that your rights are protected.