Determining Support in a Divorce
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Support is an amount of money a court awards either a parent, agency, or guardian for the support of a child or to a spouse from their former husband, wife, or partner. It is based on the income or earning capacity of the parents or spouses.
How Income Affects Support Obligations
Income is commonly referred to as the amount of money a person makes at a job. However, for support purposes, Pennsylvania defines income (23 Pa. C.S. Section 4302) as any:
compensation for services, including, but not limited to, wages, salaries, bonuses, fees, compensation in kind, commissions and similar items; income derived from business; gains derived from dealings in property; interest; rents; royalties; dividends; annuities; income from life insurance and endowment contracts; all forms of retirement; pensions; income from discharge of indebtedness; distributive share of partnership gross income; income in respect of a decedent; income from an interest in an estate or trust; military retirement benefits; railroad employment retirement benefits; social security benefits; temporary and permanent disability benefits; workers' compensation; unemployment compensation; other entitlements to money or lump sum awards, without regard to source, including lottery winnings; income tax refunds; insurance compensation or settlements; awards or verdicts; and any form of payment due to and collectible by an individual regardless of source.
The main source of aggravation in a support case comes from a self-employed party. Unlike the W-2 party, for whom income is easy to compute, the income of a self-employed party may be reduced by expenses and other deductions. However, some of the expenses and deductions that are taken on tax returns may be added back into a party’s income in determining a support award. One deduction that may get added back into income is depreciation. Depreciation is a common deduction for businesses that deal with real estate or equipment. If this deduction is not kept out of the support order, the income of a self-employed party may be significantly greater than what is reported as income for tax purposes.
When a party is unemployed or underemployed, the court may give that party an earning capacity. The imputed earning capacity is determined from several factors, of which the work history and education of the party is most important.
If you need help with a child support or spousal support matter, turn to Regan Law Firm. Attorney Kevin P. Regan has more than a decade of legal experience and has been named a Pennsylvania Rising Star. For client-focused, personalized, and effective family law representation, look no further than our firm.