One of the primary factors in determining the amount of child support or spousal support is each party’s income. Unfortunately, there are times when a parent or spouse will do something intentional to reduce their income to try to dodge a support obligation. When that happens, the Courts have the power to impute income to that party for purposes of calculating support.
What is imputed income?
Imputed income is income that is attributed or credited to a parent or spouse based on their earning capacity (i.e. what they are capable of earning) even though they are not earning that income.
If a parent or spouse voluntarily becomes unemployed or quits a job and takes a lower-paying job that does not meet their earning potential, the Court can impute income to that person when calculating support. For example, if a parent was earning $100,000 before the parties split, and then quits their job after the split and takes a job earning $50,000, the Court can use the $100,000 income figure when calculating support, even though that party is no longer earning $100,000.
Can the Court Impute Income from Assets?
The Court can also impute income from underemployed income-producing assets. For example, if a parent or spouse owns a property with a fair monthly rental value of $3,500 but rents it out for only $2,000 a month, a Court can use the property’s fair rental value when determining that parent or spouse’s net monthly income for purposes of calculating support.
What Does the Court Consider When Imputing Income?
If there is evidence that a parent or spouse has intentionally reduced or altered their income to minimize a support obligation, Courts have the power to impute income to that parent or spouse. Oftentimes the deciding factor in whether to impute income or not is if the parent or spouse’s actions were voluntary.
Imputation of income is a complicated issue in family law matters and an experienced attorney can help you protect your rights. Call The Reape-Rickett Law Firm today at 888-851-1611 to meet with a skilled attorney who can help you or visit our Contact Us page.