Many clients as well as their friends and family are surprised at how “gross income” is defined for calculation of child support purposes. DCF 150.02(13) defines gross income for child support purposes. Gross income includes all of the following:
- Salary and wages.
- Interest and investment income.
- Social Security disability and old-age insurance benefits under 42 USC 401-433.
- Net proceeds after payment of costs and attorney’s fees, medical expenses, etc., or other personal injury awards intended to replace income (emphasis added). Worker’s compensation awards for disability and personal injury awards for pain and suffering, future medical expenses, etc., are not included in the definition of gross income.
- Unemployment compensation.
- Income continuation plans.
- Voluntary deferred compensation, employee contributions to any employee benefit plan or profit sharing and voluntary employee contributions to any pension or retirement account, whether or not the account provides for tax deferral or avoidance.
- Military allowances and veteran’s benefits.
- Undistributed income of a corporation…in which the parent has an ownership interest sufficient to individually exercise control or to access the earnings of the business unless the income is an asset under DCF 150.03(4).
- All other income, whether taxable or not, except that gross income does NOT include the following:
a. Child support
b. Foster care payments
c. Kinship care payments
d. Public assistance benefits, except child care subsidy payments which shall be considered income to a child care provider
e. Food stamps
f. County-funded cash benefits
g. Supplemental security income and state supplemental payments
h. Payments made for social services or any other public assistance benefits
A number of other factors can impact child support including ability to pay, age of the child(ren), arrearages, best interests of the children, credit, dependency exemption, duty to work, earning capacity, fairness, family support and maintenance paid, educational grants and loans, health insurance, non-liable spouse’s income, trust income and more. But the place to start in determining what you will receive or be obligated to pay relative to child support starts with an accurate calculation of a party’s gross income.