Income Used for Calculating Child Support

Clients often ask the question about whether the income used for calculating child support is just limited to taxable income.  The answer is quick and easy, “NO!”

Income for child support calculations is not just limited taxable or Adjusted Gross Income that is reported to the IRS. For the purposes of determining child support, actual income is much broader and different from taxable income. A.R.M. 32.62.106 (1) explains that: “Income for child support includes actual income, imputed income, or any combination thereof which fairly reflects a parent’s resources available for child support. Income can never be less than zero.”

Since the child support guidelines include actual income, the Montana Child Support Guidelines take into account income from whatever source derived, subject to a few exclusions. Actual income can include the following:

-salaries, wages, and tips
-commissions, bonuses, and earnings
-profits and dividends
-severance pay
-periodic distributions from retirement plans
-draws or advances against earnings
-trust income
-alimony or spousal maintenance
-social security benefits
-veterans benefits
-worker’s compensation benefits
-unemployment benefits
-disability benefits
-earned income credit
-other government payments and benefits
-history of capital gains that exceed capital losses

For example, you have worked and lived on the family farm for years and receive only a $ 20,000.00 salary. However, your truck is paid for by the farm. Your gas and insurance are paid for by the farm. You live free of charge at the farmhouse, and don’t pay for your own electricity, gas, and other utilities, as they are paid for by the farm. The economic benefits that you receive in the form of your free vehicle, gas, insurance, housing, and utilities could be added to your $ 20,000.00 salary for the purposes of your child support obligation. If the evidence suggests the value of these free benefits is $ 7,000.00, your income for child support purposes would be $ 27,000.00, not $ 20,000.00

Child Support

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