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What Qualifies as Income for Child Support?

One of the largest financial impacts that divorce has is the assignment of child support, a regular check designed to see that a childs needs are met despite their parents having separated. Illinois law determines child support as a percentage of the supporting parents net income. However, this raises some important questions, namely “Exactly what qualifies as income?” and “What sorts of expenses can be netted out of that income?” As it happens, the Illinois statute governing marriage lays out the basic rule in section 505, but that basic rule can be subject to some complications.

What Qualifies as Income

The basic definition of net income in Illinois law is slightly circular. The law ends up violating that old classroom rule about never using a word to define itself, and states that net income is “all income derived from all sources” minus certain allowable deductions. This definition has left it up to the Illinois courts to determine what qualifies as income.

Courts have generally interpreted this language broadly to sweep most financial gains of the parents into their income. This is because Illinois has a stated public policy of wanting to maximize child support awards in order to benefit children, and this broad definition of income helps with that. Consequently, many unusual types of income are included in the child support calculations, even if they are only one-time things. Some examples of things that can be considered income under Illinois law include the sale of stock, lottery winnings, and employee bonuses or housing stipends.

However, in some of those cases it can be a little more complicated. For instance, an Illinois appellate court recently dealt with the issue of when a stock sale counts as income. The supporting spouse had received the stock as a gift from his father-in-law during the marriage and he sold it after the divorce for a loss. His wife argued that the sale should be included in his income for child support purposes, but the court disagreed because the sale of depreciated stock realizes a persons decreased net worth.

Allowable Deductions

Once the court has figured out what qualifies as income, the law lays out a set of specific deductions that they are allowed to take from it. These deductions include:

  • Federal and income taxes;
  • Social Security payments;
  • Retirement contributions;
  • Union dues; and
  • Certain necessary medical expenses.

The full list of allowable deductions is laid out explicitly in section 505 of the Illinois statute.

Trying to determine the full financial impact of divorce can involve applying some complex legal rules. If you are considering a divorce and want to learn more about how it might affect you, contact a skilled Naperville divorce lawyer today for more information.

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