7.4 Income Determination
7.4 Income Determination aetrahan Wed, 07/05/2023 - 11:38For an award of interim spousal support, the court looks to the net incomes of the spouses and their reasonable expenses. Thus, if you are preparing an affidavit of income and expenses for your client (the claiming spouse), be sure that you list every expense your client had during the marriage, currently has, or may have in the future. For example, if your client has been forced to move in with relatives due to the physical separation of the parties, be sure to include in the affidavit anticipated expenses for housing, utilities, food, tax on the support, etc., so that the court will fully appreciate your client’s actual expenses. Clearly, the standard of living during the marriage did not include the spouse living with relatives.
However, be cautious. If an expense is only “anticipated” and not actually incurred, the court may want proof of the amount and a reasonable estimate of when it will be incurred. For example, if a claimant spouse is planning on moving from the relatives’ home, and the apartment and utilities will be $1000.00, the court should not consider that expense until it is actually incurred (or a short time before it is incurred). The new apartment is a condition precedent to including the expenses.
On the income side, be sure not to “hide” income, including second jobs and/or rental incomes. Interim spousal support is calculated on net income, so if defending against a claim for interim spousal support, be sure to include all taxes (Medicare, social security, federal, state, and any other obligatory tax) as well as “reasonable and necessary” business expenses. Generally, these expense calculations are made at the discretion of the court, but a basis must be given, so provide evidence of these costs to encourage the court to deduct them from a client’s income.
As with child support gross income, if the obligor refuses to submit income information, the court may impute income pursuant to the wage survey assessment.1 The calculation of income is virtually identical for both spousal and child support, except that spousal support is determined on net, rather than gross income.2 A paying spouse may exclude from net income spousal support payments made to another spouse, but cannot exclude child support payments.3
As with everything else, document your client’s directives in the case file or have the client “sign off” on the decision. If your client is on SSI, spousal support may cause problems with her SSI and Medicaid eligibility. Additionally, although spousal support (interim and final) was an included deduction prior to the 2019 revision to the federal Tax Code, it is no longer deductible by the payor. Likewise, the payee no longer has to claim it as income. However, if the order is prior to 2017, support payments may still be deductible for the obligor and included in income for the obligee.4 Consult a tax professional for more advice.