In the recent case of Markferding v. Markferding, Not Reported, A-380-23, Decided November 22, 2024, the defendant appealed a trial court decision imputing him income for child support purposes. The appellate division reversed and noted, that it was ok for the trial court to impute income, since the defendant repeatedly failed to submit financial information to the court.
How Child Support Is Determined
Child support is primarily based on the combined incomes of both parents. It is required by court rule that when a person is seeking child support that both parents must submit tax returns, pay stubs, and other evidence of income. While there are other aspects of the child support calculation, the focus of this blog is on income.
In order to arrive at a fair child support award, the court generally uses the child support guidelines. Therefore, the court must have full and complete disclosure from both sides to arrive at an accurate determination of a parent's net income. If a party is unemployed or refuses to produce that information then the court will “impute” or assign income to that person (or both sides.)
Income may be imputed based on an inability to calculate an obligor's actual earnings, such as when the obligor fails to prepare a case information or financial statement as required pursuant to Rule 5:5-2. Both the child support guidelines and the case law of this State explicitly permit the imputation of income where earnings cannot be determined otherwise. So if you refuse to provide the court with sufficient financial information to make the determination, the court is going to move forward by assigning/imputing income to you anyway. Whether to impute income is a question of fact and left to the trial court's sound discretion.
Factors Considered for Imputation
The court must take into consideration the specific circumstances of the parent for whom income imputation is being considered. Additionally, the child support guidelines instruct courts to consider several factors when establishing the amount of imputed income:
assets; residence; employment and earnings history (as demonstrated by pay stubs, tax returns, Social Security records, disability statements or other records reflecting all sources of earned and unearned income); job skills; educational attainment; literacy; age; health; criminal record and other employment barriers; record of seeking work; the local job market; the availability of employers willing to hire; prevailing earnings level in the local community; what the employment status and earning capacity would have been if the family formed or remained intact; the reason and intent of the underemployment or unemployment; the ages of children in the household and child-care alternatives; the U.S. Bureau of Labor Statistics if the parent works outside of New Jersey; and other relevant background factors in the case.
In other words, the court must base the amount of imputed income on the obligor's realistic ability to earn, as opposed to a theoretical ability to earn. For example, the court can use the last documented salary as the imputed income as this is the amount that we know the obligor can earn.
If potential earnings cannot be determined, imputed income may be based on information from the New Jersey Department of Labor or the Federal Bureau of Labor Statistics. Both agencies provide information about average wages for various jobs. As a last resort, New Jersey's minimum wage may be used. Whatever the court decides to do, it still has to explain why, by setting for the factual basis and either issuing a written or verbal decision.
Seek Legal Assistance
Child support orders are enforced through probation and they will garnish your pay, levy your tax refunds, or accounts. You need experienced representation to make sure that harsher penalties are not imposed if you cannot afford to pay the amount of child support ordered. If the trial court has imputed income to you and it is wrong, contact the experienced attorneys at LaBletta & Walters to review your case.