Under What Circumstances Do Courts Impute Income in New York State Child Support Matters?

When calculating child support in New York, courts typically base their determinations on the actual income earned by both parents. However, there are situations where a parent's reported income doesn't accurately reflect their true earning capacity. In these cases, New York family courts have the authority to "impute" income, essentially attributing a higher income to a parent than what they're currently earning or reporting. Understanding when and how courts impute income is crucial for both custodial and non-custodial parents involved in child support proceedings. In this post a Syracuse child support attorney explains what you need to know.

What Does It Mean to Impute Income?

Income imputation occurs when a court assigns a specific income level to a parent for child support calculation purposes, regardless of what that parent actually earns. This isn't a punitive measure but rather a tool to ensure that child support obligations fairly reflect a parent's earning potential and that children receive appropriate financial support.

Primary Circumstances for Income Imputation

New York courts will consider imputing income in several key situations:

Unemployment or Underemployment

The most common scenario involves a parent who is unemployed or underemployed. If a court determines that a parent is voluntarily unemployed or working below their capacity without good reason, it may impute income based on what that parent could reasonably earn. For example, if a licensed attorney is working part-time as a retail clerk, the court might impute income based on what attorneys typically earn in the relevant market.

However, courts recognize legitimate reasons for reduced income. A parent who lost their job due to downsizing, who has a documented disability, or who is caring for a young child may not have income imputed. The key question is whether the employment situation is voluntary and reasonable under the circumstances.

Failure to Provide Financial Documentation

When a parent fails to provide complete and accurate financial information despite court orders, judges may impute income as a consequence. This often happens when a parent is self-employed or receives cash payments and refuses to fully disclose their earnings. The court may look at tax returns, business records, lifestyle indicators, and other evidence to determine an appropriate income level.

Income from Assets

If a parent has significant assets that aren't producing income, such as cash in a non-interest-bearing account, valuable property, or investments, the court may impute income based on what those assets could reasonably generate. This prevents parents from artificially reducing their income by keeping assets in non-productive forms.

Self-Employment and Business Ownership

Self-employed parents or business owners present unique challenges in income calculation. Courts scrutinize claimed business expenses, depreciation, and deductions that may reduce reported income on tax returns but don't reflect true earning capacity. Income may be imputed when a parent takes excessive personal expenses through their business or underreports actual earnings.

How Do Courts Determine the Amount to Impute?

When deciding to impute income, courts consider multiple factors:

• Employment history and qualifications: What has the parent earned in the past? What education, training, licenses, or certifications do they hold?

• Local job market conditions: What opportunities exist in the parent's geographic area for someone with their skills and experience?

• Age and health: Physical or mental limitations that genuinely affect employability are taken into account.

• Childcare responsibilities: Courts recognize that primary caretakers may have legitimate limitations on their working hours.

• Recent job search efforts: Has the parent been actively and reasonably seeking appropriate employment?

Courts may use various methods to determine the imputed amount, including reviewing salary data for similar positions, examining the parent's previous earnings, or considering expert testimony about earning capacity.

The Legal Standard: Willfulness and Good Faith

A critical element in income imputation cases is whether the parent's reduced income is voluntary or in bad faith. Courts must find that the parent is deliberately avoiding support obligations or has unreasonably failed to pursue appropriate employment. Legitimate life circumstances, such as returning to school for career advancement, managing a serious health condition, or experiencing genuine economic hardship, can justify reduced income.

Burden of Proof

Generally, the burden falls on the party seeking to have income imputed to demonstrate that the other parent is underemployed or unemployed without good reason. However, if a parent fails to provide required financial documentation, the burden may shift, and that parent must prove their actual income level or face imputation.

Practical Implications

Income imputation has significant consequences. Once income is imputed, child support calculations proceed based on that imputed amount, and the parent may be required to pay support at a level higher than their actual earnings. This can create financial strain if not addressed properly.

For parents concerned about income imputation, whether you're seeking to have income imputed to the other parent or defending against imputation, thorough documentation is essential. Maintain records of job searches, medical conditions affecting employment, childcare responsibilities, actual business expenses, and any other factors relevant to your employment situation and earning capacity.

Modification Based on Changed Circumstances

It's important to note that imputed income isn't necessarily permanent. If circumstances genuinely change, such as reaching retirement age, experiencing a legitimate disability, or facing dramatically altered job market conditions, a parent can petition for modification of the child support order.

Contact A Syracuse Child Support Attorney Today

If you're facing a child support matter where income imputation may be at issue experienced legal guidance is crucial. An attorney familiar with New York family law can help you present the necessary evidence, understand your rights and obligations, and work toward a fair outcome that serves your child's best interests. Contact our office today for a free confidential consultation with an experienced Syracuse child support attorney.

For more information on child support, please visit our Child Support in New York State and Frequently Asked Questions pages

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Laws and guidelines can change, so always verify with current statutes or a professional.