Imputing Income for North Carolina Child Support
Child Support in North Carolina is presumptively established by the North Carolina Child Support Guidelines. In most cases, Family Law Judges are tasked with determining Child Support according to the Guidelines which utilizes a calculation based on the number of children and how many overnights they spend with each parent, the parents’ gross monthly income, work-related childcare costs, health insurance premiums for the children, and other extraordinary costs such as private school tuition. Obviously, each parent’s income is a key component and the amount of income attributed to each parent can significantly impact the Child Support obligation.
We say income “attributed” to each parent because the Court has wide discretion in determining each parent’s gross monthly income. In general, a parent’s income is based on their actual income at the time Child Support or established or modified. For example, a parent with only one source of income being a job paying $60,000 per year would be attributed a gross monthly income of $5,000. However, there are important exceptions to this rule that allows North Carolina Family Court Judges to attribute a different income than what a parent may or may not actually earn.
If the Court finds that a party has deliberately suppressed their income to reduce or avoid their Child Support obligation, the Judge may base Child Support on that parent’s earning capacity or prior income, not their current, actual income. For example, a parent with 10 years experience as a cardiologist with a substantial annual income that quits his or her job to take an unpaid internship with the Carolina Panthers can be attributed the income he or she earned as a cardiologist, despite not actually having those earnings at the time of the Child Support hearing.
To attribute an income to one parent different than their actual income, commonly referred to as “imputing” income, the Court must find that the reduction in income is due to that parent’s bad faith to reduce income. In the above example, the Judge must find that the cardiologist quit his or her job and accepted an unpaid internship with the Panthers in bad faith to reduce income. While working with the hometown NFL team may be a fun opportunity, the Court likely would not allow that parent to avoid his or her financial obligation to children by including $0.00 as their income for calculating Child Support.
Changing jobs for a lesser paying position does not automatically establish bad faith or that the Court would impute that parent’s higher earnings from the prior position. The burden of proving bad faith is on the parent seeking to impute income on the other. The Court has wide latitude as to what it will consider to establish whether a parent depressed income in bad faith and should be imputed a higher income to calculate Child Support.
While North Carolina’s use of actual income is meant as a safeguard for most parents, it can have adverse effects in certain situations where a parent has acted with the intent to lower their Child Support obligation through the reduction of their income. Fortunately, parents have some protections built in via the ability to impute income to a party acting in bad faith. To speak with a North Carolina licensed attorney today about your Child Support case, please call our office at (704) 810-1400 to schedule a confidential consultation.