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Imputing Income For Purposes Of Child Support: When Child Support Is Not Based On Your Actual Income

| Feb 4, 2024 | Child Support

In North Carolina, child support is generally determined based upon the parties’ actual incomes at the time the child support order is entered. However, there are circumstances when a judge can determine a child support obligation based on a party’s potential income rather than their actual income. If a judge finds that a party is deliberately suppressing his or her income or failing to exercise his or her earning capacity, to avoid or minimize a child support obligation, the judge may impute a higher income to that party that is based on the party’s potential income rather than their actual income. In these circumstances, a judge must find that a party is acting in bad faith and is motivated by a desire to avoid or minimize his or her child support obligation.

When a judge imputes potential income to a party, it must be based on the party’s employment potential and probable earnings, as well as other vocational factors. If the party has no recent work history for comparison, then the child support guidelines provide that the potential income anticipated “should not be less than the minimum hourly wage for a 40 hour work week.”

Establishing that a parent’s earning capacity and income potential is in excess of the minimum hourly wage of a 40 hour work week can be challenging if there is no recent work history. If a party has a college degree, special skills, or other credentials, but is voluntarily unemployed or underemployed, or otherwise failing to maximize his or her earning capacity, your attorney may recommend that you retain the services of a vocational expert. A vocational expert can conduct an assessment of the party’s education, work experience, employment opportunities, and other factors, to determine the party’s income earning potential. The testimony of a credible vocational expert in court or at a deposition can be very effective in establishing a party’s income potential and earning capacity. Presenting reliable evidence of a party’s earning capacity and income potential can be crucial to the outcome of your case if you are asking the judge to determine child support based on a party’s potential income rather than their actual income.

In North Carolina, both parents are presumed to be financially responsible for the support of their child. However, the North Carolina Child Support Guidelines prohibit judges from imputing potential income to a parent who is physically or mentally disabled or who is the primary custodian for a child under three years of age and for whom the support is being determined.

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