How Are Bonuses and Irregular Income Treated in Nebraska Child Support Calculations?
Posted By: William Finocchiaro
In this article, you will discover:
- Types of income Nebraska courts consider when calculating child support
- How child support is calculated in Nebraska when a parent is self-employed or has fluctuating income
- Whether irregular income can trigger a request for modification of child support
What Types Of Income Do Nebraska Courts Consider When Calculating Child Support?
When calculating child support, Nebraska courts utilize total monthly income. Total monthly income is the income of both parties, derived from all sources, excepting means-tested public assistance.
This calculation includes income that the parties could acquire through reasonable efforts, as well as imputed income or earning capacity. Earning capacity is considered for situations when someone might be under-earning or choosing not to work.
Therefore, when you impute income to a parent, the court will consider the specific circumstances of the parent, including where they live, their employment, earning history, job skills, education, age, and health, to determine their earning capacity, which may be more than they’re making in some situations.
Are Bonuses, Commissions, Or Other Irregular Payments Included As Income?
Bonuses, commissions, or most other irregular payments may be included as income. Income is defined as all income derived from whatever source, including wages, salaries, commissions, tips, business profits, dividends, and interest. When it comes to overtime wages and child support, overtime can be included if it is a regular part of the employment and the employee can expect to earn it regularly going forward.
To determine whether working overtime is part of regular employment, the court will consider factors such as the employee’s work history, the degree of control the employee has over work conditions, the nature of the employee’s business or industry and the employee’s historical earnings from overtime.
How Do Courts Handle Self-Employed Parents With Inconsistent Or Fluctuating Earnings?
When a parent is self-employed or has inconsistent or fluctuating earnings, determining annual income can be more challenging than for a W-2 employee. Because self-employment has unique tax implications, there are often questions about which expenses are legitimate business expenses and which are personal.
Also, inconsistent or fluctuating earnings often make it difficult to predict annual income from one year to the next. Therefore, when income fluctuates, the courts may elect to take an average from the last two to four years, based on what’s fair and equitable in the circumstances.
Can Irregular Income Trigger A Request For Child Support Modification?
Irregular income can trigger requests for a child support modification, but not always. Specifically, a modification of child support can be requested when there has been a substantial and material change in circumstances.
When the income of the parties results in a change of more than 10% of the current support obligation, that 10% increase or decrease is presumed to be a material change that allows the parties to modify child support based on the current updated income and deductions.
The key is to determine whether the updated calculation increases or decreases the current obligation by more than 10%.
Why Is Legal Guidance Important When Determining Support In Complex Income Situations?
In complex income situations, the attorneys at Vacanti Shattuck Finocchiaro can help determine what your actual income is for child support purposes. When you start getting into income that fluctuates, due to inconsistent earnings, dividends, stock options or self-employment, it becomes more complex and not as straightforward as looking at your W-2 from the prior year.
Not only can we determine your actual income for child support, but we can also ensure that it’s fairly calculated. In the context of modification actions, many individuals think that because their income has fluctuated, it will determine whether they can file a modification. That isn’t always the case.
Generally, changes in the income of the party paying child support will have a more drastic effect on both the calculation and the child support obligation of the parent receiving child support.
You need to determine whether you have a situation where you meet that threshold to increase or decrease your obligation by 10% to ensure that you’re efficient in filing a successful case.
Still Have Questions? Ready To Get Started?
For more information on bonuses and Nebraska child support calculations, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (402) 345-7600 today.
