All Indiana courts use the same Child Support Obligation Worksheet to determine financial support for children during divorce and paternity cases. The calculation always begins with the “weekly gross income” of both parents. “Weekly “ is self-explanatory and “gross” means before taxes or deductions, but what counts as “income”?
The Indiana Child Support Rules and Guidelines define “weekly gross income” in Guideline 3(A). The term “income” can include money received from all kinds of sources such as salaries, wages, commissions, bonuses, overtime pay, partnership distributions, dividends, severance pay, pensions, interest, trust income, annuities, structured settlements, capital gains, social security benefits, worker’s compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, inheritances, prizes, alimony and maintenance received. So, when considering if money you receive is income for child support purposes, think broadly.
When a parent is employed to his or her full potential, weekly gross income for child support purposes is the sum of every kind of income received. For instance, a parent who earns an hourly wage would include the weekly total of hourly wages earned as well as any overtime wages earned. If a parent earns a bonus or commissions, those are also counted. The calculation gets admittedly tricky when bonuses and commissions are uncertain or sporadic. The Indiana Child Support Rules and Guidelines provide some guidance on how to handle irregular income, but it’s best to chat with an attorney about your options so that your calculation is fair.
When a parent is not unemployed or underemployed, weekly gross income is an estimate of what that parent has the potential to earn. For example, if a parent decides to stay at home with the children and personally earns no income, a court will consider what that parent could earn if he or she entered the workforce. Education, training, and experience will be evaluated to assess what a parent is capable of earning even if he or she has chosen not to. If a parent is temporarily unemployed because of a job loss, his or her potential income is likely to be guided by what that parent was making at the last job.
Self-employed parents or parents who own businesses can offset against their gross receipts the ordinary and necessary expenses that parent is required to spend to generate those receipts. For instance, if a parent earns money from a rental home, but has to pay a mortgage and taxes on the rental home, the weekly gross income of that parent will include the difference between the rent received and the mortgage and tax payments made.
The Child Support Rules and Guidelines have also been updated as of May 14, 2024. If it’s been a while since your child support has been ordered, and/or if you have changed jobs, consider speaking with an attorney to help you decide if an adjustment in child support may be warranted in your case.
