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Calculating Child Support: What Is Considered Income?

If you share a child with a person you are no longer married to, or were never married to, chances are you have heard of Tennessee Child Support Guidelines. In Tennessee, a person’s child support obligation is calculated pursuant to a child support worksheet which is governed by these Guidelines.

A child support calculation is determined by a number of factors: the number of children between the parties, number of days out of the year spent with each party, each party’s gross (not net) income, cost of health insurance, and cost of work-related child care. Some other factors can come into play, such as if either party has other children or if the child has extraordinary medical or educational expenses.

One question that often arises is “Exactly what is considered income to each party?” The Guideline provides the following:

“Gross income of each parent shall be determined in the process of setting the presumptive child support order and shall include all income from any source (before deductions for taxes and other deductions such as credits for other qualified children), whether earned or unearned, and includes, but is not limited to, the following:

(i) Wages;

(ii) Salaries;

(iii) Commissions, fees, and tips;

(iv) Income from self-employment;

(v) Bonuses;

(vi) Overtime payments;

(vii) Severance pay;

(viii) Pensions or retirement plans including, but not limited to, Social Security, Veteran’s Administration, Railroad Retirement Board, Keoughs, and Individual Retirement Accounts (IRAs);

(ix) Interest income;

(x) Dividend income;

(xi) Trust income;

(xii) Annuities;

(xiii) Net capital gains;

(xiv) Disability or retirement benefits that are received from the Social Security Administration pursuant to Title II of the Social Security Act, whether paid to the parent or to the child based upon the parent’s account;

(xv) Workers compensation benefits, whether temporary or permanent;

(xvi) Unemployment insurance benefits;

(xvii) Judgments recovered for personal injuries and awards from other civil actions;

(xviii) Gifts that consist of cash or other liquid instruments, or which can be converted to cash;

(xix) Prizes;

(xx) Lottery winnings; and

(xxi) Alimony or maintenance received from persons other than parties to the proceeding before the tribunal.”

But, what if the other party is claiming to earn less income than he or she has traditionally earned in the past? The guidelines allow for the argument that a party is underemployed and has the capacity to earn more income than reported, and that the court should impute income to that party equal to his or her earning capacity.

Another question that arises is, “What if one party is military and receives a housing allowance? Is that considered income for child support purposes?” The guidelines provide the following answer:

“Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), and Variable Housing Allowances (VHA) for service members are considered income for the purposes of determining child support.”

Although the calculation of child support can be simple if all of the information is accurately provided, it can sometimes be complicated and it helps if you have representation that is familiar with the Tennessee Child Support Guidelines.

If you’re seeking representation for a child support case or another family law matter, call 865-685-4780 to schedule a case assessment with Melanie Hogg or another Held Law Firm attorney.