WHAT IS
NET INCOME FOR PURPOSES OF SUPPORT?
What is my net income for purposes of
calculating child and spousal support….isn’t
it what is deposited into my checking account on pay
day?
NO! To determine each parent’s net income
available for support, the Pennsylvania Rules of Civil Procedure 1910.16-2(c)
provides that only the following items shall be deducted: federal, state, and
local income taxes; unemployment compensation taxes and Local Services Taxes;
F.I.C.A. payments, mandatory union dues; alimony paid to the other party and non-voluntary retirement payments. Your voluntary retirement contributions to 401(k) are added back as income. Your bonus is income for purposes of
calculating child support, spousal support and alimony pendente lite and alimony.
Income may be a benefit from a
business or dealings in property, interest, rents, royalties, and dividends,
income from an interest in an estate or trust, Social Security disability
benefits, Social Security retirement benefits, worker’s compensation or
unemployment compensation is considered income used to calculate support. Receipt of a monthly pension benefit,
disability benefits, and severance pay is also considered income. Pursuant to the Pennsylvania Rules of Civil
Procedure 1910.16-2(a)(8) receipt or entitlement to money and lump sum awards,
including lottery winnings, insurance compensation or settlement, awards and
verdicts, income tax refunds, and any form of payment due to and collectible by
an individual regardless of source is
considered income for calculating support.
Determining income becomes more
complicated when an individual’s income is based on commissions and if he or
she has an ownership interest in a business, partnership, or corporation.
Keep in mind, Pennsylvania law defines
income differently and more broadly then the internal revenue service. When consulting with an attorney regarding
this issue, make sure you provide the following documents:
Ø Personal Tax
Returns – including all supporting documents and schedules;
Ø Corporate
Tax Returns – including all supporting documents and schedules;
Ø Employment
Agreement;
Ø Severance
Agreements;
Ø Pay stubs
including bonus pay stubs; and
Ø Bank
statements for the last year.
