Aug. 11, 2020
North Carolina defines gross income as actual or in-kind income from any source in calculating child support. I guess the easiest way to explain what income is to tell you what is not considered income for child support calcuation. Money from public assistance such as SSI, and child support from another party for another child are not considered income. Temporary Assistance to Needy Families (TANF) and Electronic Food And Nutrition Benefits are not included.
Courts cannot use incomes of step-parents or third parties such as grandparents who have physical custody of the child.
The list for what is considered income for child support calculation is pretty vast. Income can be salaries, wages, commissions, bonuses, dividend, severance pay from employment, self-employment, operation/ownership of a businesses, partnerships, corporations etc. Income can be rental income, retirement, pension, interest, trust annuities, capital gains, Social Security benefits, workers compensation benefits, unemployment benefits, disability pay, insurance benefits, gifts, prizes and so on.
Alimony can be counted as income only if the alimony is being paid by someone that is not a party in the child support action. For example, a parent, who receives alimony from a prior marriage, but is seeking child support for a child with her boyfriend will have to include the alimony as her income.
When income is irregular such as earnings from seasonal employment or on a one-time basis, the court could average or prorate the income over a specified period of time. For example, if a parent receives a Christmas bonus at the end of the year, the court could prorate it over 12 months.
Many people are under the mistaken belief that VA Disability and Social Security benefits are not counted as income for child support calcuations. They are definitely considered income. What about VA benefits and Social Security benefits received for the child as a result of a parent's disability? Is that considered income? Let me answer by giving an example. Let's say a child receives $300 per month in social security benefits because of a parent's disability. The $300 will be included in that parent's income (because the benefit is based on that parent's earning) but deducted from the child support amount. So if the guideline child support amount is $500, then the child support obligation will be $200. If the guideline child support amount is $300 or less then there will be no child support order.
In-kind benefits are also considered income. If you live rent free at your parents house, or drive a car with someone else making the car payment for you, the value of that benefit can also be considered income. The party making that argument will have to explain to the court how the value was determined.
Income from self employment can be challenging to establish because many people pay themselves under the table, or have their businesses pay for their living expenses to show a lower amount on their W-2. So if a self employed parent has free housing paid by his/her business, or use a company car for personal use, that can be a form of in-kind income.
What happens if a parent quits his/her job or works less hours in order to avoid or minimize child support payments? If the court determines the parent acted in bad faith, or was deliberate in suppressing his/her income, the court will inpute the wage from the prior job or other earning levels relevant to the parent's employment history for calculation purposes.
Being able to navigate paystubs, tax returns and bank records is an essential skill your attorney should have when dealing with child support.