When is reported income disregarded for child support or alimony (maintenance) in New York?
New York has several laws regarding child support and alimony, and courts also have considerable discretion in determining these support and alimony amounts. Although the most common way of calculating either is by using both parties’ reported incomes, there are situations where the court can choose to disregard one or both of those.
If you’re going through a divorce or a child support case, then your income will have a significant impact on either how much money you receive or how much you’re ordered to pay. Here’s what you need to know about how these payments work and the times when a court may disregard the income you report.
How Child Support and Alimony Work
When two people have a child together, both are obligated to support that child financially. There are two main factors that will determine which party pays child support and the amount of that child support – both parties’ respective incomes and who has primary custody of the child.
The parent who has primary custody of the child will receive child support from the other parent. The amount that the other parent will pay depends on how much money that parent makes.
When a couple gets divorced, the spouse who earned more money may be required to pay alimony to their ex-spouse. This alimony is intended for the recipient to continue living their normal life without a drastic change in lifestyle.
Child support and alimony are completely separate. There can be situations where a person pays both. For example, if a couple has a child together and gets divorced, one spouse may need to pay both child support and alimony to the other.
Reporting Income to the Court
For both child support and alimony calculations, the court needs both parties’ incomes. The two parties will report how much money they make. This may not necessarily be only what they make from their jobs. If one party has investments or other sources of income, they would need to include those, as well.
The ideal scenario is that both parties report their income accurately, making it easy for the court to calculate child support or alimony. But if this doesn’t happen, then the court may disregard a reported income.
Why a Court Would Disregard a Reported Income
There are quite a few situations when a court would elect to disregard the income a person reports, but what most boil down to is a situation where the person has been deceptive about their income.
The most obvious case would be if a person lies about how much money they make. They could report a lower income than they actually made or fail to report some of their income sources. The court may require the person to present tax returns or other types of income verification to see if their reported income was accurate. If not, the court will go with the person’s real income.
The court may also consider a person’s earning potential if it appears that they’re willingly making a lesser amount. For example, if a person elects to work part time, the court could disregard their income and use what that person would make if they worked full time.
In situations where the court is considering how much a person could make, it will look at several different factors, including what they’ve made in the past, their level of education and their skillset. It may compare the person’s salary to the salaries of those with similar backgrounds, and evaluate whether the person is pursuing employment that fits their background.
While self-employed people and business owners can report their official income after any deductions they make, the court may decide to add deductions back into that person’s income, especially if the person has substantial deductions.
One of the trickiest situations is when a person has unreported income, such as a worker who receives all or partial cash payments. In that case, the court could look at many different factors, and the other party could also present evidence showing that the person makes more than they reported. This process could involve looking at bank statements, evaluating the person’s lifestyle and possibly even having forensic accounting done to analyze the person’s finances.
Accurate Income Reporting Is the Best Choice
It’s best for both parties in a child support or divorce case to be honest about how much money they make. The court has plenty of tools to find out someone’s real income, and if you’re dishonest about your income, you could face penalties. There’s also the possibility that the court ends up setting your income too high because you misreported it, which would lead to a higher payment amount for you. And if the court catches you in a lie, you’ll appear less trustworthy going forward.