- Wages, overtime, commissions, bonuses, business profits, self-employment, rentals, annuities, pensions, retirement accounts, disability payments, worker’s compensation, unemployment benefits, trust fund, military special pay, military allowance for quarters and rations, drill pay, tips, royalties, dividends, capital gains.

- Income from overtime or a second job.

- Employer contributions to retirement plans.

- Market value of any work-related perks, if they reduce personal expenses, like a company car.

- Between the two parents, spousal support is not deducted from the payer’s income, and is not counted as income for the payee. If either parent gets spousal support from someone else, it counts as income.

- Interest from inheritance and gifts. The property or principal from a one-time gift doesn’t count.

- Gifts from relatives or others can be income if it regularly reduces expenses or replaces employment income. Gifts can include shelter or transportation, too.

- Disability, social security, or survivor’s benefits received for the children, if based on the earnings record of someone other than a parent, count as custodial parent income.

- Government handouts like TANF, a bridge card, earned income credit, and SSI do not count.  

- Child’s income doesn’t count unless it’s really, really high.

- A child’s SSI benefits are not income and do not reduce support.

- Standard (basic needs) of an adoption subsidy for the children of the current case count. Medical needs, intensive rate, and family support subsidy don’t count.

 

- If income varies, use the average of the last three years.

 

- What About Additional Children? This calculator (The Estimator), already takes this into account. See "Children From Other Relationships" sections.

 

- What if his/her accountant does the taxes to make it look like s/he doesn’t have an income? Use common sense here. It’s what the income really is that matters, not how creative the accounting is. Income includes everything that’s coming in, minus expenses. Things like depreciation do not count.

 

- Expenses from the parent’s business don’t count. It wouldn’t be fair to count all the income from a business but not deduct the expenses. On the other hand, self-employment can’t be used to hide true income. For example, if the business pays the parent rent, that counts as the parent’s income. A business owner can deduct for a customer’s entertainment expenses, but they can’t deduct their own entertainment expenses from their under the guise of their business. A parent also can’t use the guise of a business to deduct home rent, hazard insurance, home and auto maintenance from their income.. Basically, a parent can’t use his/her business as a cover to pretend s/he doesn’t have any income. What money a parent really has coming in after legitimate expenses is their income.

 

- What about insurance payouts? If it’s compensation for lost income, it’s income. If it’s payments for medical bills and the like, it’s not.

 

- What about G.I. benefits? Education allotment does not count. Anything else does.

 

- What about lottery earnings? Only if it’s regular income or generates regular income.

 

- Seasonal Income - use the year's average.

 

- Variable Income - look at the last three years. The court won’t automatically average the last three years, but will use that information to determine income. The court may take into account the varying nature of income. (See p 8, 2008 MCSFM).

 

- What if the other parent could earn more but chooses not to? If a parent is voluntarily unemployed or underemployed, income includes the potential income the parent could earn. This is called imputing income. But this is limited to the parent’s actual ability to earn the income. So, while a parent can’t quit his/her job to avoid paying support, a parent can’t expect the other parent to earn income s/he is not actually capable of earning.

- A parent is not imputed income if they give up over time (35+ hrs/wk), or leave a second job.

- If a parent’s assets could, but are not, used to generate income (think rental property), income includes a reasonable investment return.

 

For a list of factors for whether to impute income, see the 2008 Michigan Child Support Formula Manual, page 7.