WHAT IS CONSIDERED INCOME FOR CHILD SUPPORT PURPOSES?

Bag with child support

Determination of child support is based on the New Jersey Child Support Guidelines. The idea behind the child support guidelines is that both parents should share in the responsibility of financially supporting the child and the child’s quality of living should not suffer just because the parents are not living under one roof. New Jersey child support takes both parents’ incomes into account when setting the amount to be paid. The question then becomes, what is “income” for purposes of calculating child support?

New Jersey uses the “income shares” model of child support calculation. This means that the guidelines aim to determine how much a family would spend on supporting the child if the family remained “intact,” and then divide that amount proportionately between the two parents based upon their incomes. The support amount is based on the combined net income of both parents. Net income is the gross income, less allowed deductions. Gross income includes income from a variety of sources, including wages, commissions, self-employment income, pension income, bonuses, or rental income. In other words, if you receive income from a source other than simply your “day job,” it is likely those funds will also be factored into your support obligation. If you are paid on an hourly basis and your pay fluctuates from pay period to pay period, it will likely be necessary to use an average over several pay periods to fairly determine your income. Similarly, if you sometimes are paid overtime, it is best to use an overview over a period of time to get an accurate determination of how much income you really make. Discuss with your attorney how best to determine an accurate amount of your gross income.

Allowable deductions may then be taken from your gross income to determine your net income. These deductions include expenses like income taxes, child support for other children, spousal support from a previous marriage, mandatory pension contributions and mandatory union dues.

It is important to also note what is not included in these allowable deductions. Expenses like utilities, mortgage or rent payments, or voluntary retirement contributions, for example are not allowed to be deducted from your gross income. Although these may be legitimate expenses, they are not considered allowable deductions for child support purposes. These rules are also more complicated when one party is self-employed since many business deductions are personal expenses.

Child support calculations include many rules and exceptions. We would value the opportunity to discuss your child support obligation with you, and to determine if the income for both you and the other parent is properly set.

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