Imputed income is the estimated income attributed to a parent, calculated based on their earning capacity rather than their actual earnings.
This typically applies when a court believes a parent is intentionally unemployed, underemployed, or purposely reduces their income to avoid higher child support payments.
Imputed income is an important and frequently contentious issue in child support cases, as it involves assigning a potential income to a parent based on their ability to earn rather than their actual earnings.
In this article, we will thoroughly explore the topic of imputed income for child support, its significance, calculation methods, and the impact it can have on both custodial and noncustodial parents.
What is Imputed Income for Child Support?
Imputed income is an assumed or potential income assigned to a parent by the court when they are not earning at their full capacity, either due to unemployment, underemployment, or intentional suppression of income.
It is a concept used to ensure that both parents fulfill their financial responsibilities towards their children, even if one parent attempts to evade their obligations by not earning what they are capable of.
Methods Courts Use to Calculate Imputed Income for Child Support
Courts use various methods to determine imputed income for child support when one parent is intentionally or voluntarily earning less than they are capable of earning.
Imputed income is an estimated income that the court attributes to a parent based on their earning capacity rather than their actual income.
This is done to ensure that child support payments are fair and equitable. The specific methods used may vary depending on the jurisdiction, but some common approaches include:
1. Employment Opportunities
The court may consider the parent’s work history, education, skills, and experience to assess their potential earning capacity. If the parent is unemployed or underemployed, the court may look for suitable job opportunities that match their qualifications.
2. Comparable Wage Analysis
The court might use salary data from comparable jobs or industries in the local area to estimate the parent’s potential income.
3. Previous Earnings
If the parent has a history of earning a certain income, the court may use that as a basis for imputed income if there is no valid reason for the decrease in earnings.
4. Occupational/Vocational Expert Testimony
In some cases, the court may seek the input of a vocational expert who can assess the parent’s earning capacity based on their qualifications, experience, and the current job market.
5. Minimum Wage
If the parent is not working or not working enough, the court may impute income based on the minimum wage or the prevailing wage for their skill level.
6. Local Job Market
The court may consider the availability of jobs in the parent’s area and impute income based on what an average person with their qualifications could reasonably earn.
7. Willful Unemployment or Underemployment
If the court determines that the parent is intentionally avoiding higher-paying employment opportunities, they may impute income based on what the parent could earn with reasonable effort.
8. Income Records and Tax Returns
The court will typically review the parent’s financial records, tax returns, and any evidence related to their income and employment.
9. Income from Assets
If the parent possesses significant assets, the court may impute income based on a reasonable return from those assets.
Please keep in mind that the process of imputing income may vary by State, and each case is evaluated based on its unique circumstances.
The Role of Voluntary Unemployment and Underemployment
One of the main challenges in imputing income is determining whether the unemployment or underemployment of a parent is voluntary or involuntary.
Voluntary unemployment is when a parent chooses not to work, intentionally reducing their income to avoid child support obligations.
On the other hand, involuntary underemployment occurs when a parent genuinely cannot find suitable employment despite making reasonable efforts.
Factors Considered by Courts When Imputing Income
When a court imputes income, it considers various factors to arrive at a fair and accurate assessment. Some factors include:
Work History and Education
The court will examine the parent’s past employment records, including their job history, work experience, and educational qualifications.
Skills and Training
The court will consider the parent’s skills and training relevant to the job market will be considered. This includes any specialized training, certifications, or licenses they possess.
Health and Disability
If the parent has health issues or disabilities that may impact their ability to work, the court will consider these when imputing income.
Local Job Market
The court will consider the availability of job opportunities and the prevailing wage rates in the parent’s local job market.
Employment Opportunities
The court will assess whether the parent is genuinely trying to find suitable employment opportunities.
Previous Earnings
If the parent has a history of earning a certain income, the court may use this as a reference point when imputing income.
Willful Unemployment or Underemployment
If the court finds evidence that the parent is intentionally avoiding higher-paying jobs or reducing their work hours to avoid paying higher child support, it may impute income based on their earning capacity.
Occupational Expert Testimony
In some cases, the court may seek the expertise of vocational or occupational experts to evaluate the parent’s earning potential.
Age and Workforce Trends
The court will consider the parent’s age and its relevance to workforce trends and employability in their profession or field will be taken into consideration.
Geographic Factors
The court will consider geographic factors, such as the cost of living in the parent’s area, which may influence the imputed income determination.
Income Records and Tax Returns
The court will review the parent’s financial records, tax returns, and any other relevant documents related to their income and employment.
Educational and Training Opportunities
The court may consider whether the parent has access to educational or training opportunities that could improve their earning potential.
Best Interests of the Child
Ultimately, the court’s primary concern is the best interests of the child. The imputed income determination aims to ensure that the child’s financial needs are adequately met.
Tim’s Legal Tip: Please note that imputing income is a complex process that involves careful consideration of various factors. Courts aim to be fair and impartial in their assessments to ensure child support orders are reasonable and just for all parties involved.
Imputing Income for the Noncustodial Parent
When determining whether to impute income for child support for the noncustodial parent, the court must make the following findings:
- Any imputed income must be within a parent’s capacity to earn. If the noncustodial parent was earning a different income before trial, the court should consider that income in calculating retroactive child support.
- The court has the authority to impute a higher income than what a parent actually earns if the parent has the capacity to make more than they are currently earning.
- The evidence must support the imputed income amount and not be based on mere speculation. The court record should indicate how the imputed income was calculated.
- When imputing income for an underemployed or unemployed parent, the court will consider what they could earn if they made their best efforts to find suitable employment.
- If a parent voluntarily and deliberately becomes unemployed to avoid child support obligations, the court can impute income accordingly. However, if there is no evidence of an attempt to evade responsibility, the court should refrain from imputing income.
- In cases where a parent is terminated from their job, the court may impute income if the parent does not make sufficient efforts to find new employment, refuses job offers, or fails to demonstrate that their unemployment is only temporary.
Can a “Stay-At-Home Mom” Have Income Imputed For Child Support Calculations?
Whether a “stay-at-home mom” can have income imputed for child support calculations depends on the specific laws and regulations of the State where the child support case is being handled.
In many States, both parent’s income and earning capacity are considered when determining child support payments.
This means that even if a parent, such as a stay-at-home mom, is not currently earning an income, the court may consider her potential earning capacity or past work history when calculating child support.
If a couple agreed before having children that the mother would stay home and raise the kids, this agreement could be considered when imputing income for child support calculations. If there was an agreement, it is less likely the court will impute income to the stay-at-home mom.
The decision for one parent to stay at home and forgo potential income to care for the children is a significant choice made by both parents, and it may be taken into account during child support proceedings.
Other factors that could be considered when imputing income for a stay-at-home mom may include their education, work experience, qualifications, job opportunities in the local market, and other relevant factors that could influence their ability to generate income.
FAQs about Imputed Income for Child Support
Q. What happens if a parent intentionally quits their job to avoid child support?
In cases of voluntary unemployment, the court may impute income based on the parent’s previous earnings or potential earning capacity. The parent will still be responsible for child support payments based on this imputed income.
Q. Can imputed income be modified over time?
Yes, imputed income can be modified if there are substantial changes in the parent’s circumstances, such as obtaining a new job, losing a job, or facing health issues that impact their ability to work.
Q. What if a parent genuinely cannot find employment?
If a parent is involuntarily unemployed or underemployed despite making reasonable efforts, the court will take their situation into consideration and may not impute income.