Calculating “Net Income” In Relation to Child Support 

The term “net income” relative to a child support order is not always a simple calculation, especially when it involves self-employed parents, parents on commissions or bonuses, and other non-regular or non-reporting wage earners.

When trying to determine child support, the court begins with a basic formula outlined under IMDMA §505.  Net income is the total of all income minus the statutorily defined deductions (750 ILCS 5/505(a)(3)).  The concept of “net income” is intentionally broader than just wages or earnings, though for many parents there is little difference between the two.  See §15 of the Income Withholding for Support Act, 750 ILCS 28/1, et seq., which defines an even broader definition of “income”.

Illinois courts have held that “income” includes passive income from bonds and securities but excludes passive income that is reportable on income tax returns, but is not actually received by the party.  In re Marriage of Harmon, 210 Ill.App.3d 92, 568 N.E.2d 948, 154 IllDec. 727 (2d Dist. 1991) (unearned income is included in net income, but gifts and interest payments received from investments of non-custodial mother’s share of marital estate received from custodial father at time of dissolution were not);  In re Marriage of Dodds, 222 ill.App.3d 99, 583 N.E.2d 608, 164 Ill.Dec. 692 (2d Dist. 1991) (net income includes workers’ compensation award).

The parent responsible for paying support will have their net income determined by their latest available income tax return or other more recent and reliable data.  See Marriage of Schroeder, 215 Ill.App.3d 156, 574 N.E.2d 834, 158 Ill.Dec. 721 (4th Dist. 1991).  In Schroeder, 574 N.E.2d at 837, the appellate court  held that the court of record had erred in assessing the father’s income by averaging his wages over the past six years to determine the amount of support and instead should have based it’s support ruling on the income figures shown on the latest income tax retrn.

See Also:

Deductions the Court Allows for the Purpose of Determining Child Support 

Is Child Support Tax Deductible? 

Children’s Right To Be Supported 

Think About What is Best for the Child