Imputed Income in Illinois Divorce

Stacks of Money

One major piece of any divorce involving children is calculating the proper amount of child support. A key input in that calculation is the amount of income that the supporting parent earns. Ordinarily, determining the parents income is simply an exercise in checking records, but there are some cases where the court will increase the supporting parents income compared to what they are actually earning. This increase, known as imputed income, occurs in two scenarios. First, it happens when supporting parents consciously earn less than they could in order to evade a support obligation. Second, courts will impute income to certain business-owning spouses when it can be difficult to distinguish the income of the business and the income of the parent.

Evading Support Obligations

One of the main reasons that courts will impute income is because the supporting parent can be earning more than they actually are. This can happen in two cases, either through voluntary underemployment or voluntary unemployment. The underemployment context occurs in cases where a parent is employed, but they could be earning more than they do at their job. The court can decide that the parent is under-earning based on a variety of reasons. Some of them are general, such as the parents vocational training or work experience compared to their current job. Others are more specific, such as the parent not taking a promotion that they were offered, or delaying the payment of commission or bonuses.

The other common instance of imputed income is when the supported parent is voluntarily unemployed. Courts will find cases of voluntary unemployment when the parent has quit or intentionally gotten fired, yet they refuse to find another job without a medical reason for doing so.

Business-Owning Spouses

The other common instance of imputed income is when the supporting spouse owns a business. There are certain instances where spouses have control of a business and as such can manipulate the amount of income they receive as compared to the amount of income that they choose to reinvest in the business. A recent case dealt with this in the context of S-Type corporations. Those corporations have an extra wrinkle in that taxes on them are decoupled from actual payments to the shareholders. This means that the corporations can end up paying out only enough to actually cover the taxes and keeping the rest in the company for future years. Consequently, courts may use imputed income in some circumstances to allow the child support to properly reflect the amount of money that the parent actually earns.

Family law involves many doctrines like this to try to allow legal decisions to better reflect reality. If you are considering divorce and have questions about how the process works, contact a skilled Naperville family law attorney today.

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