Computation of child or spousal support generally involves a three-step process.
First, the court must determine the income and expenses of the parties; second, it must determine the needs of the obligee; and finally, based on the ability of the obligor to pay and the needs of the obligee, it must enter an appropriate order for support.
A discussion of these nonmoney items follows in section III, infra. 1995) (tax definitions of income are not determinative); In re Marriage of Eaton, 894 P.2d 56 (Colo. 394, 825 P.2d 561 (1992) (the court is not bound by federal or state income tax returns in determining monthly income); Powell v.
Items Excluded from Gross Income In most states, "gross income" is specifically defined to excludethe following: benefits received from means-tested public assistance programs, including Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), Food Stamps (FS), Section 8 housing allowance, and General Assistance grants.
Nonmoney items may also be included in the definition of income.
Most states have included in the definition of income, for both the wage earner and the self-employed, employment perquisites such as use of the company car, free housing, and reimbursed meals, where such reduce personal living expenses, and in-kind income, such as the forgiveness of a debt and the use of property at less than the customary charge. IA (these sources of income are for the purpose of establishing child support and do not necessarily correspond to the sources of taxable income as set forth by the Internal Revenue Service); In re Marriage of Nimmo, 891 P.2d 1002 (Colo. 1995) (tax status not determinative); In re Marriage of Jacobson, 251 Mont.
This article will focus on the legal definitions of income and expenses. The various states have included in their definition of income the following: These items are discussed in detail in section II of this article.
If the question is not whether a particular benefit constitutes income on the law, but rather whether a particular benefit was actually earned or should have been earned on the facts, the issue is one of imputed income. INTRODUCTION: STATUTORY DEFINITIONS OF "INCOME" Items Included in Gross Income Each state's child support guidelines generally contain a definition of "gross income." "Gross income" is usually defined to include money received from any source. Most states have also adopted a special definition of income for the parent who has control over his or her income stream.
While the article focuses primarily on the definitions of income and expenses for child support, reference will also be made to alimony cases considering the issue. 303.8 (federal regulations require that state guidelines, at a minimum, take into consideration all income and earnings of the obligor). A discussion of these excludable items follows in section IV, infra. E.2d 624 (1993) (the statutory definition of income is intended to be both broad and flexible); In re Marriage of Bucklin, 70 Wash. 2d 7, 855 P.2d 1197 (1993) (the failure to include all sources of income available is reversible error). Income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation includes gross receipts minus ordinary and necessary expenses required to produce such income. A discussion of "gross receipts" concludes section II, infra. In the case of child support, the enactment of child support guidelines has refined the calculus further; the legislature has presumptively determined "needs" and thus the appropriate level of support based on the income and expenses of the parties.
This article will focus upon the first of these three steps: the definitions of "income" and "expenses" of the parties for purposes of support. But see In re Guidelines of Child Support Enforcement, 863 S. 1993) (income refers to the definition in the federal income tax laws, less proper deductions).