What Is “Imputed Income”?

In determining the correct amount of support to be paid by one spouse to the other (maintenance or spousal support) or by a parent on behalf of a child (child support), the Court must utilize the statutory definition of “income”. “Income” is the gross, or total, income that was or should be reported on the most recently filed tax returns. This is generally regarded as one’s earnings from employment.

“Income” also includes, however, other forms of remuneration, including, but not limited to, investment income, income voluntarily deferred to another tax year, workers’ compensation, and benefits received from unemployment, social security, military service, and retirement plans. All these forms of income are readily proved by reference to W-2 forms, 1099 forms and other proof of income generated annually by the payor.

The Court is also empowered to “impute” or attribute income to a spouse or parent from other resources. These other resources include

• non-income producing assets
• meals, lodging memberships, automobiles or other benefits that are provided as part of one’s compensation to the extent that they confer a personal benefit
• fringe benefits provided as part of compensation
• money, goods or services provided by relatives or friends

In determining the amount to impute, the Court must consider a variety of factors. Just a few of these are the parent/spouse’s residence, assets, employment and earning history, job skills, age and health. The Court’s decision must specifically identify the basis for its decision to impute income.

The Court may also impute income to a spouse/parent if it determines that the spouse/parent has reduced his/her income or resources in a deliberate attempt to avoid payment of support. Under these circumstances, the Court will determine the payor’s earning capacity, not actual earnings.

The statutes governing spousal support and child support, and, in particular, the calculation of each party’s income, are intricate and complex. The guidance of an experienced matrimonial or family law attorney is a must. Contact the attorneys at O’Connell & Aronowitz for a consultation. Visit oalaw.com