Child Support and Imputed Income
The law is certain that parents have a progressing commitment to financially bolster their minor kids. Although most parents have no issue with this obligation of help, a few parents oppose what they consider to be inordinate youngster bolster arranges and may purposefully diminish wage to bring down their help payments. The law has specific rules for situations where paying parents reduce their earnings without good cause. In Utah, the courts may add back into the child support calculation the income that the paying parent claims to have lost. This concept is known as “imputing income.” Here, we try to show how Utah courts impute income when the paying parent is falsely lowering their earnings to reduce or avoid paying child support . If you have questions after reading this article, you should contact an experienced family law attorney in your area.
Utah law states specifically that children are entitled to share in the current incomes of both parents. State law uses a formula to determine how much child support should be paid by one parent to the other parent. For more detailed information about the child support law in Utah.
What is Imputed Income?
On the off chance that a judge decides that the parent who is in charge of paying kid bolster (the paying guardian) has purposefully brought down his or her profit, the court can characteristic extra salary toward the paying guardian with a specific end goal to set up a reasonable youngster bolster arrange – one that will give adequate financial help to the kid. This is called “imputing income.” Courts won’t impute income when there is good cause for a reduction in support. However, when judges find that a parent has voluntarily reduced income, then the paying parent will likely be ordered to pay support based on his or her earning capacity.
Some parents may think their child support payment is too high or feel that they should not have to pay any child support at all. They may try to find ways to avoid their obligation to their children. Some paying parents may decide to quit a job, refuse to find replacement work, and then ask the court to reduce their child support payment. In Utah, if a court determines that the paying parent lost a job deliberately, he or she will be considered voluntarily unemployed, and the judge will not reduce the child support order.
What is Voluntary Underemployment?
The term “underemployment” means that the paying parent has intentionally taken a lower paying job or hides income to lessen the child support order. In other words, the paying parent is working below his or her full earning potential.
A paying parent may be underemployed when he or she is no longer working in an occupation for which she or he has been trained and is working at a lower paying job. For example, a registered nurse may decide to leave a lucrative hospital job and take a minimum wage job in a daycare. The court could rule that the nurse is underemployed and should be earning more money.
The paying parent doesn’t necessarily have to be deliberate in trying to lose or lower income. Utah law holds that if the paying parent’s loss of earnings is due to neglect, income can be imputed.
A court could also find a paying parent to be underemployed if the paying parent defers taking sales commissions or bonuses. For example, right before a scheduled child support hearing, the paying parent defers taking a year-end bonus by asking his or her employer to pay the bonus at a later time. The intention is to keep the bonus hidden, so it’s not used to calculate child support. If it’s proven that this was the paying parent’s ploy, the judge may impute or add the bonus back into the calculation.
In child support cases, Utah law requires that both parents provide their most recent income tax returns and written proof of their current and past earnings. The judge has this information available for reference to see what the paying parent was earning in the past and base child support on that amount, rather than the artificially reduced amount of income.
When the paying parent has no significant work history or fails to provide his or her income history, the judge may refer to the most recently published Utah Occupational Employment Wage Survey. The judge will draw on this information to establish what the paying parent’s imputed income should be.
Utah law has code sections that focus on business owners who may try to use the business to hide income. If the business owner is lending the business money to minimize his or her earnings, the loan interest should be at the going market rate. Otherwise, the loan amount could be counted as income for child support calculation purposes.
Free Consultation with Child Support Lawyer
If you have a question about child support or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506