4. Welcome back! This all sounds really easy, doesn't it? Well, let's start to look at where the complications come into play. The first complication is the question of this Lesson: What is considered to be “gross income” for child support calculations?
Fortunately, KRS 403.212(2)(b) defines "gross income" for us, and it is not just what you would see on a W-2 form. Let's take a look at the statute:
"Gross income" includes income from any source, except as excluded in this subsection, and includes but is not limited to income from salaries, wages, retirement and pension funds, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, Social Security benefits, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, Supplemental Security Income (SSI), gifts, prizes, and alimony or maintenance received. Specifically excluded are benefits received from means-tested public assistance programs, including but not limited to public assistance as defined under Title IV-A of the Federal Social Security Act, and food stamps.
Can you see the room for interpretation here?
Capital gains - what if Father sold the family business last year and had a big gain? He makes $6,000 per month in salary, but had a capital gain of $600,000 last year. Whoa! Do we add in another $50,000 per month to his "monthly gross income"?
Gifts - What about that $500 Mother's Aunt Gertrude has been giving the family every month? Now she is mad at Father and says she is giving the $500 to Mother only. Or, what if she has Mother sign a Promissory Note every time she "gives" her a $500 check? She is worth millions, and the whole family knows she will never expect it to be paid back. Or maybe she just quits giving them anything until the question of child support gets resolved.
Supplemental Security Income - What about SSI benefits, which are federal benefits based on financial need? Yes, they are included, but not means-tested public assistance programs such as Medicaid, TANF benefits (Temporary Assistance for Needy Families - formerly AFDC), and foodstamps.
What about payments received by a child based on the disability of a parent? KRS 403.211(15) tells us that these payments are not counted as income for either parent, but are credited against the child support obligation, if any, of the disabled parent.
Alimony or maintenance? Yes, for purposes of "gross income" in calculating child support in Kentucky, maintenance paid to a spouse is considered income to the recipient, and it is deductible to the payor. We will talk about that further in Lesson 8.
I may have asked more questions than provided answers in this Lesson, but trust me - there are many more questions about determining "gross income." Use wisely any knowledge you gained in this Lesson!
Fortunately, KRS 403.212(2)(b) defines "gross income" for us, and it is not just what you would see on a W-2 form. Let's take a look at the statute:
"Gross income" includes income from any source, except as excluded in this subsection, and includes but is not limited to income from salaries, wages, retirement and pension funds, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, Social Security benefits, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, Supplemental Security Income (SSI), gifts, prizes, and alimony or maintenance received. Specifically excluded are benefits received from means-tested public assistance programs, including but not limited to public assistance as defined under Title IV-A of the Federal Social Security Act, and food stamps.
Can you see the room for interpretation here?
Capital gains - what if Father sold the family business last year and had a big gain? He makes $6,000 per month in salary, but had a capital gain of $600,000 last year. Whoa! Do we add in another $50,000 per month to his "monthly gross income"?
Gifts - What about that $500 Mother's Aunt Gertrude has been giving the family every month? Now she is mad at Father and says she is giving the $500 to Mother only. Or, what if she has Mother sign a Promissory Note every time she "gives" her a $500 check? She is worth millions, and the whole family knows she will never expect it to be paid back. Or maybe she just quits giving them anything until the question of child support gets resolved.
Supplemental Security Income - What about SSI benefits, which are federal benefits based on financial need? Yes, they are included, but not means-tested public assistance programs such as Medicaid, TANF benefits (Temporary Assistance for Needy Families - formerly AFDC), and foodstamps.
What about payments received by a child based on the disability of a parent? KRS 403.211(15) tells us that these payments are not counted as income for either parent, but are credited against the child support obligation, if any, of the disabled parent.
Alimony or maintenance? Yes, for purposes of "gross income" in calculating child support in Kentucky, maintenance paid to a spouse is considered income to the recipient, and it is deductible to the payor. We will talk about that further in Lesson 8.
I may have asked more questions than provided answers in this Lesson, but trust me - there are many more questions about determining "gross income." Use wisely any knowledge you gained in this Lesson!
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