By: Carl A. Taylor III, Esq.
As prior posts have emphasized, both parties’ incomes are perhaps the biggest factor in determining child support in New Jersey. Generally, this income will be based upon a party’s W-2 income. For instance, a teacher earning $50,000 per year will have gross income of $50,000 per year for child support purposes. But what about when salary isn’t so easy to calculate? For instance, what if a party is recently out of work, or owns a business? That’s when <strong>imputed income</strong> may be utilized by a Court or agreed to by the parties.
Here are a few examples of New Jersey income imputation:
<strong>Examples of Income Imputation </strong>
#1. If one of the parties to a marriage was a stay at home mom or dad, then their current gross salary would be $0.00. The Court might order, however, that this same person should now get a job. A divorce changes the parties’ financial dynamics afterall, and generally increases the living expenses for the parties as well.
As the individual does not as yet have a job, an income may then be imputed for child support and other purposes. The amount of this income will be fact sensitive, and may include factors such as work history/experience, education, the type of work, and the amount of years since the individual last worked. At a bare minimum, minimum wage will likely be imputed, along with a yearly income of approximately $20,000.00.
#2. Another example would be when someone has been out of work for quite some time. If this individual used to earn $100,000 per year, the Court might now impute a lesser amount, to reflect the lack of present employment or hope of equal present employment. With the economy the way it is, and unemployment still exceedingly high, the New Jersey Courts have become more receptive to such issues.
#3. Finally, a business owner may have more income imputed to him or her than can be found on their federal income tax returns. Certain expenses that are marked as business expenses might be considered by the Court as personal in nature, and thus added back.
Although the above examples somewhat simplify the concept of income imputation, they do provide the basic framework of the concept.
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