What qualifies as ‘income’ factored into child support payments?

When many Maryland residents think of income, they may think solely of the money they receive from their jobs. This is typically in the form of a weekly, biweekly, or monthly paycheck. However, when a parent must make child support payments the courts consider just about any type of money received to be included in his or her actual income amount. According to the General Assembly of Maryland, income is a broad term that encompasses a variety of monetary sources.

Besides the obvious – salaries and wages – income also includes job-related income such as commissions and bonuses. If the parent is disabled, injured, or unemployed, any money that they receive from state or federal sources – such as disability insurance, workers’ compensation, unemployment, and Social Security – is counted. If the parent has income or interest from retirement accounts – such as pensions, trusts, and annuities – this is included in the actual income as well.

If the parent is self-employed, then actual income is determined by subtracting business expenses from gross receipts. In some cases, capital gains, severance pay, prizes and gifts may also be considered income. To complicate things even more, income can also mean “potential income.” Sometimes parents voluntarily quit their jobs, reduce their work hours, or fail to look for employment so they can avoid paying for child support. If the courts have proof that this has happened, a person can still be ordered to pay child support based on how much money they could be potentially making if they were working to their full capacity.

As seen here, child support guidelines are not always cut and dry. Based on the courts’ true definition of income, it’s easy to see how Maryland parents may overlook some of the money they receive outside of employment like child support payments.

Source: General Assembly of Maryland, “Family Law, Section 12-201,” accessed on Nov. 20, 2014