Whether you’re paying child support in Utah or receiving it, you have a vested interest in making sure that the amount of child support payments is fair—both to you and your child. As you may know, child support in Utah is determined using the Utah child support calculator, which takes into account the number of children being supported, the number of overnights they spend with each parent, and each parent’s monthly gross income.
That sounds pretty straightforward. It shouldn’t be difficult to figure out how many children you have. And your parent time order should dictate the number of overnights. But the issue of “monthly gross income” trips a lot of people up. For one thing, not everyone has a salaried job that produces the same amount of income every month. Many people have to take their annual gross income from tax documents and divide it by 12 to arrive at their monthly gross income.
Of course, people may have more than just minor variations in their monthly income. Many people work multiple jobs or overtime at their main job. In general, income from employment is based on one 40-hour per week job in Utah, unless one parent regularly and consistently works more hours. For instance, if one parent had occasional overtime at their job, but the other worked 50 hours nearly every week, income from the regular overtime would be considered in the gross income calculation. Income from the occasional overtime would not be.
Some people receive bonuses as part of their compensation. Bonuses may be significant and may also vary wildly from year to year. Does a bonus count as income for child support payments? And if it does, how do you plan for variations in the amount of a bonus from year to year?
The short answer is yes. Bonus income is included in the various types of income that are considered when calculating child support payments. Here’s what Utah Code Section 78B-12-203 includes in gross income:
“As used in the guidelines, “gross income” includes prospective income from any source, including earned and nonearned income sources which may include salaries, wages, commissions, royalties, bonuses, rents, gifts from anyone, prizes, dividends, severance pay, pensions, interest, trust income, alimony from previous marriages, annuities, capital gains, Social Security benefits, workers’ compensation benefits, unemployment compensation, income replacement disability insurance benefits, and payments from “nonmeans-tested” government programs.”
Whether or not you get a bonus every year, or your bonus is the same amount, it is included in gross income. If the bonus tends to be a similar amount from year to year, you can add the amount to your annual salary or wages and divide that amount by 12 to arrive at the amount of monthly gross income to put in the Utah child support calculator. But if your bonus varies depending on an annual performance or company profits, it may be more challenging to determine how much it contributes to your monthly gross income.
Child support payments are generally based on previous earnings, which means that you could end up over- or underpaying based on your bonus income the previous year. Some states get around this issue with an order that a certain percentage of a parent’s annual bonus will be paid as child support.
Bonuses are not the only thing that can cause variations in regular income. Self-employed individuals and business owners also don’t receive a regular paycheck. Utah Code § 78B-12-203(4)(a) allows self-employed individuals to “subtract necessary expenses required for self employment or business operations” from their gross receipts in order to arrive at “monthly gross income.”
The word “necessary” is key here. There are expenses you may be able to deduct from your income for income tax purposes, but that does not automatically make them “necessary” in the child support context. Expenses you can deduct from income for child support purposes are those truly required to keep the business operating at a reasonable level.
What do you do if you think your child’s other parent is deliberately unemployed or under-employed to avoid paying child support? If you can support these suspicions (e.g. showing that the parent previously worked a professional, full-time job, but is currently working part-time in retail), the court may be willing to “impute” income—in other words, acting as if the other parent is actually earning what they are capable of earning.
If you have more questions about what counts as income for purposes of calculating child support payments (or alimony), please contact Barton Wood to schedule a consultation. Remember that child support in Utah is determined by formula, but the result that formula yields is only as accurate as the numbers used to calculate it. An experienced Utah family law attorney can help you ensure that your child support calculations are accurate and fair to all involved.