What Is Considered “Income” When Calculating Child Support?

As a child support attorney in Nashville, Tennessee, I understand that support calculations can feel overwhelming. However, understanding what counts as income is a crucial step.

Whether you're preparing to file for support or reviewing an existing order, knowing these details can help you better understand the process. 

Every child needs financial stability, which is why these calculations aim to reflect the resources available for their care. Parents who grasp the factors involved in determining income are better equipped to advocate for fair outcomes.

How Tennessee Law Defines Income for Child Support

In Tennessee, the calculation of child support primarily relies on the parents’ income. The state uses an income shares model, which considers the combined income of both parents to determine support obligations. Income isn’t limited to traditional wages but encompasses several sources.

Under Tennessee guidelines, "gross income" includes earnings from:

• Salaries and hourly wages: These are the most common forms of income used in child support calculations. Tennessee courts rely on documented earnings like pay stubs or employer-provided statements to assess financial contributions.

• Commissions, bonuses, and tips: Earnings from commissions, bonuses, and tips are included because they contribute to a parent’s overall income. Courts may review past payment history to determine the consistency and reliability of these sources.

• Self-employment or freelance income: Income from self-employment or freelance work is considered, even if it fluctuates. Parents must provide detailed financial records, such as profit and loss statements, to make for accurate reporting.

• Rental property income: Rental income is included because it reflects regular earnings from investments. Parents are required to report gross rental income, minus expenses like property maintenance or taxes.

Additional sources, like pensions, Social Security benefits, and severance pay, are also factored in. Tennessee law strives to include any form of compensation that contributes to a parent’s financial stability.

Non-Traditional Income Sources

Not all income is straightforward, and some types can be easily missed. For example, parents receiving irregular earnings, such as royalties or occasional consulting fees, might not immediately consider these amounts in their gross income.

The courts also evaluate income from:

• Trust disbursements or inheritances: Income from trusts or inheritances is typically included when calculating child support if it provides regular or substantial financial benefit. Tennessee courts consider these funds as part of a parent's overall ability to support their child.

• Military allowances: Military service members often receive allowances for housing, food, or other living expenses, which are included in gross income. These allowances reflect additional resources available to fulfill child support obligations.

• Gambling or lottery winnings: Winnings from gambling or lotteries are considered income if they contribute to a parent’s financial stability. Tennessee law includes such irregular earnings to make sure the support calculation reflects all financial resources.

Disclosing all non-traditional income sources is essential to creating a fair and accurate child support order. This transparency helps the court protect the child’s right to adequate financial support while holding both parents accountable.

What Is Imputed Income?

Tennessee courts may impute income when a parent is voluntarily underemployed or unemployed without a valid reason. Imputed income reflects the earning potential a parent could reasonably achieve based on their education, skills, and work history.

For instance, a parent with a history of stable employment who suddenly quits their job might have an earning capacity assigned by the court. This approach prevents a parent from shirking financial responsibilities.

In cases where a parent disputes imputed income, the court may require evidence, such as job applications or employment market data. This helps the assigned earning capacity to align with the individual’s realistic opportunities.

Parents often wonder how changes in circumstances might influence imputed income. That leads to a discussion of income adjustments.

Adjustments to Income for Child Support

While gross income is the starting point, Tennessee law allows certain adjustments. For example, a parent may deduct specific expenses, like mandatory retirement contributions or health insurance premiums for the child. 

These deductions are intended to balance financial obligations fairly. If one parent pays child support for a child from another relationship, that amount is also deducted from their income calculation. 

Adjustments help make sure that all parties involved are treated equitably under the law. Courts carefully review all requested adjustments to confirm they’re valid and supported by documentation. 

This process is essential to maintaining fairness and consistency in child support calculations. In addition to deductions, courts may consider extraordinary expenses related to the child’s care, such as medical treatments or special educational needs. 

These expenses can lead to adjustments in the calculated support amount, seeing that the child’s unique requirements are addressed. As I outline adjustments, it’s a good time to consider how accuracy impacts income reporting in child support cases.

Why Accurate Reporting is a Crucial Step

Reporting income accurately is vital in Tennessee child support cases. Parents must provide thorough documentation of their earnings, including pay stubs, tax returns, and bank statements. Failure to do so can result in incorrect support amounts, which may need to be recalculated later.

To streamline the process, my office strives to offer assistance with gathering financial documents. Accuracy at the outset minimizes disputes and reduces the likelihood of modifications. Parents should also stay proactive by updating income records whenever circumstances change. 

Consistently accurate reporting secures smoother proceedings and fewer complications in future child support adjustments. This brings me to the final section, where frequently asked questions help clarify common concerns.

Frequently Asked Questions About Income and Child Support

Handling child support cases often will bring up recurring questions about what counts as income and how it’s calculated. To address some of the most common concerns, answers to frequently asked questions follow:

• What if my income changes after the child support order is issued?
  Child support can be modified if there's a significant change in circumstances, such as job loss or a promotion. It’s important to notify the court promptly to request an adjustment and avoid potential arrears.

• Are overtime and bonuses included in gross income?
  Yes, Tennessee considers overtime and bonuses as part of gross income unless they’re unpredictable or irregular. Courts often review patterns over time to determine if these earnings should be consistently factored in.

• Does income from a second job count?
  Typically, yes. Any employment-related income is included in the calculation. The rationale is to fairly account for all resources available to support the child.

• What if the other parent hides their income?
  The court can investigate and may impute income based on evidence of earning potential or lifestyle. Financial disclosures and subpoenas can help uncover hidden income sources.

• How do self-employed parents report income?
  Self-employed parents must provide detailed records, including business profits and expenses. Courts may require additional documentation, such as invoices and bank statements, to verify income.

Contact Me With Questions

Determining income for child support purposes is a detailed process under Tennessee law. In my practice, I hope to help parents in Davidson County, Sumner County, Wilson County, and Rutherford County address these challenges. If you need assistance with your child support case, contact me at Cynthia J. Bohn, Attorney at Law.