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What counts as income when calculating child support?

| Jun 1, 2017 | Child Support |

Like other states, Arizona relies heavily on each parent’s income when it comes to calculating how much child support a parent will have to pay. What Tempe residents might not realize, however, is just how broad the definition of “income” is in the context child support. The definition is so broad, in fact, that a person may wind up having income counted for child support purposes even though it would not have to appear on a person’s tax returns.

Basically, Arizona law considers just about any money that flows in to a person’s pocketbook to be income for child support purposes, no matter what the source. Not surprisingly, this definition of income includes all income naturally thought of as money one earns at a traditional job, including those professions which work on commission or for tips. It also includes items like certain types of disability payments, unemployment, and worker’s compensation.

Even regular gifts from a parent or other benefactor count as “income,” even though gifts ordinarily are not subject to income tax. “In-kind” benefits, like in the case of someone who lives rent free with his or her parents, can also count.

Those who might be retired or independently wealthy can expect that the court will consider income from things like trust funds or retirement pensions. Similarly, a person who is in business for himself or herself will have income calculated by subtracting necessary business expenses from one’s gross receipts.

There are a couple of important limitations on what counts as “income.” For one, some government assistance programs are not included. Moreover, Arizona’s support guidelines specifically state that judges should not increase child support because a parent chooses to take on a second job or work some overtime. Generally, a parent will be assumed to have one full time job, and support will be calculated accordingly.