Definition of Income For Child Support

DEFINITIONS:

(1) Income. - "Income" means: (1) actual income of a parent, if the parent is employed to full capacity; or (2) potential income of a parent, if the parent is voluntarily impoverished.

(2) Actual income.
(1) "Actual income" means income from any source.
(2) For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation "actual income" means gross receipts minus ordinary and necessary expenses required to produce income.
(3) "Actual income" includes:
(i) salaries;
(ii) wages;
(iii) commissions;
(iv) bonuses;
(v) dividend income;
(vi) pension income;
(vii) interest income;
(viii) trust income;
(ix) annuity income;
(x) Social Security benefits;
(xi) workers’ compensation benefits;
(xii) unemployment insurance benefits;
(xiii) disability insurance benefits;
(xiv) alimony or maintenance received; and
(xv) expense reimbursements or in-kind payments received by a paret in the course of employment, self- employment, or operation of a business to the extent the reimbursements or payments reduce the parents personal living expenses.

(4) Based on the circumstances of the case, the court may consider the following items as actual income:
(i) severance pay;
(ii) capital gains;
(iii) gifts; or
(iv) prizes.
(5) "Actual income" does not include benefits received from means-tested public assistance programs, including temporary cash assistance, Supplemental Security Income, food stamps, and transitional emergency medical, and housing assistance.

(3) Adjusted actual income. "Adjusted actual income" means actual income minus:
(1) preexisting reasonable child support obligations actually paid; (2) of this subtitle, alimony or maintenance obligations actually paid; and
(3) the actual cost of providing health insurance coverage for a child for whom the parents are jointly and severally responsible.

(4) Combined adjusted actual income. "Combined adjusted actual income" means the combined monthly adjusted actual incomes of both parents.

(5) Potential income. "Potential income" means income attributed to a parent determined by the parent’s employment potential and probable
earnings level based on, but not limited to, recent work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community.

(6) Ordinary and necessary expenses. "Ordinary and necessary expenses" does not include amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses or investment tax credits or any other business expenses determined by the court to be inappropriate for determining actual income for purposes of calculating child support.

(7) Extraordinary medical expenses. (1) "Extraordinary medical expenses" means uninsured expenses over $100 for a single illness or condition. (2) "Extraordinary medical expenses" includes uninsured, reasonable, and necessary costs for orthodontia, dental treatment, asthma treatment, physical therapy, treatment for any chronic health problem, and professional counseling or psychiatric therapy for diagnosed mental disorders.

(8) Shared physical custody. "Shared physical custody" means that each parent keeps the child or children overnight for more than 35% of the year and that both parents contribute to the expenses of the child or children in addition to the payment of child support.

(9) Adjusted basic child support obligation. "Adjusted basic child support obligation" means an adjustment of the basic child support obligation for shared physical custody.

(10) Basic child support obligation. "Basic child support obligation" means the base amount due for child support based on the combined adjusted actual incomes of both parents.