Line 1 Instructions

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Gross income of parents

DIRECTIONS: Enter monthly gross income (annual gross income divided by twelve) for each parent.

"Gross income" includes, but is not limited to, salaries, wages, commissions, dividends, severance pay, pensions, interest, trust income, annuities, partnership distributions, social security benefits, retirement benefits, workers’ compensation benefits, unemployment compensation benefits, disability insurance benefits, social security disability benefits (SSD) due to a parent’s disability, veterans’ disability benefits and military allowances for subsistence and quarters.

Overtime compensation, bonuses, earnings from secondary employment, recurring capital gains, prizes, retained earnings and significant employment-related benefits may be included, in whole or in part, in "gross income" in appropriate circumstances.

If a parent is unemployed or found to be underemployed, "gross income" may be based on imputed income.

Excluded from "gross income" is temporary assistance for needy families (TANF) payments, Medicaid benefits, supplemental security income (SSI) benefits, social security disability (SSD) benefits received on behalf of a child, food stamps, general assistance benefits, other public assistance benefits having eligibility based on income, and child support received for children not the subject of this proceeding.

If a parent receives rents or royalties or is self-employed, in a sole proprietorship, or business with joint ownership, "gross income" is gross receipts minus the ordinary and necessary expenses incurred to produce such receipts. Depreciation, investment tax credits and other non-cash reductions of gross receipts may be excluded from such ordinary and necessary expenses.

COMMENTS:

A. "Income" for purposes of computing the presumed child support amount consists of a financial benefit or money received by a parent that could have a positive impact on the parent’s ability to support the parent’s children.

B.Trust Income: When determining whether to include trust income and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. the authority of the parent under the trust to direct payment of monies from the trust, including any authority to invade and control distribution of the trust corpus;

  2. the authority of the parent under the trust to make decisions concerning investment of the assets of the trust;

  3. the realistic expectation that the parent will continue to receive the amount of trust income received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods; and

  4. the validity of the reasons of the parent in making any adjustment in trust income from that received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods.

C.Overtime Compensation and Secondary Employment: When determining whether to include overtime compensation and earnings from secondary employment and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. the consequence of exercise by the parent of periods of temporary physical custody or visitation with the children who are the subject of this proceeding on the parent's ability to receive overtime compensation or earnings from secondary employment;

  2. the motivation of the parent in working overtime, including whether overtime was a condition of employment, or in working secondary employment during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  3. the amount of overtime compensation and earnings from secondary employment received by the parent during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  4. the realistic expectation that the parent will continue to receive the amount of overtime compensation and earnings from secondary employment received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods; and

  5. the number of additional dependents for whom the parent is financially responsible, whether or not there is an existing court or administrative order under which the parent is paying or receiving support.

D. Bonus: When determining whether to include bonuses and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. the consequence of exercise by the parent of periods of temporary physical custody or visitation with the children who are the subject of this proceeding on the parent's ability to receive a bonus;

  2. the motivation of the parent in earning bonuses during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  3. the amount of the bonuses received by the parent during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  4. the realistic expectation that the parent will continue to receive the amount of the bonuses received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods; and

  5. the number of additional dependents for whom the parent is financially responsible, whether or not there is an existing court or administrative order under which the parent is paying or receiving support.

E. Capital Gains: When determining whether to include capital gains income and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. the amount of capital gains income received by the parent during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  2. the realistic expectation that the parent will continue to receive the amount of capital gains income received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  3. the validity of the reasons of the parent in making any adjustment in capital gains income from that received during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods.

F. Retained Earnings: When determining whether to include retained earnings and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. whether reinvestment of the business' income is an ordinary and necessary expense to allow the business to operate at a reasonable level;

  2. whether reinvestment of the business' income is intended for maintenance

    of the business or growth of the business;
  3. whether reinvestment of the business' income is reasonable based on sound business practices; and

  4. the validity of the reasons of the parent for reinvestment of the business' income.

G. Non-taxable income and significant employment-related benefits may be converted in appropriate circumstances to "gross income" through applicable federal and state income tax tables.

H. Imputed Income: When determining whether to include imputed income and, if so, the amount to include in a parent's "gross income," a court or administrative agency shall consider all relevant factors, including:

  1. the parent's probable earnings based on the parent's work history during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

  2. the parent's occupational qualifications;

  3. the parent's employment potential;

  4. the available job opportunities in the community; and

  5. whether the parent is custodian of a child whose condition or circumstances make it appropriate that the parent not be required to seek employment outside the home.

CAVEAT: If income and, where appropriate, reasonable work-related childcare costs are imputed in calculating the presumed child support amount payable to an unemployed parent entitled to receive support, then the support ordered paid by the parent obligated to pay support shall not exceed the presumed child support amount payable if these items are not imputed.

I. Self-Employment: Gross income from an unincorporated business is the net profit or net loss on the schedules filed as part of the parent’s federal income tax return. However, expense reimbursements or in kind payments by the business to pay for expenses of the parent that are personal in nature and not business related may be income to the parent. Therefore, "gross income" of the parent for purposes of computing the presumed child support amount may differ from the net profit or net loss of the business for income tax purposes.