How is Income Calculated for Child Support Purposes?

Child support is calculated using the gross income of the parents. Gross income is income from any source, including but not limited to salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, recurring monetary gifts, annuities, capital gains, social security benefits, workers’ compensation benefits, basic and variable allowances for housing and subsistence from military pay and benefits, unemployment insurance benefits, disaster unemployment assistance received from the United States Department of Labor, disability insurance benefits, and spousal support received from a preexisting spousal support obligation; Expense reimbursement or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business, if the reimbursements or payments are significant and reduce the parent’s personal living expenses.

An overwhelming majority of cases involves two parents who received their income in the form of W-2 wages, and gross income is the income before taxes and other deductions. In those cases, determining gross income is not usually rather simple. However, determining gross income for self-employed parents is significantly more complicated.