WHAT IS CONSIDERED INCOME FOR CHILD SUPPORT PURPOSES?
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
your child support obligation with you, and to determine if the income
for both you and the other parent is properly set.