As discussed in a previous article, a trial court may impute income to a support payer when it has been determined that he or she is voluntarily unemployed or underemployed. The next consideration is to determine the amount of imputed income to be used in the support calculation. The answer may be as simple as using the actual earnings from the last full time employment. The answer may also involve an analysis of a multitude of factors. The factors to be considered include prior employment history, education, availability of employment in the geographic and career field of the payer, as well as prevailing wage and salary levels. There must be evidence that the support payer has the ability to earn the imputed income.
Often, a support payer’s income fluctuates, not because of voluntary unemployment or underemployment, but rather because he/she works on a commission basis, or is in an industry which has been substantially effected by the state of the economy, such as commercial or residential real estate. In a recent case from Summit County, Ohio, the trial court held that it was appropriate to use a three year average of the support payer’s income in determining both child and spousal support. The court recognized that husband’s income significantly decreased because of the decline in the real estate market, but believed husband’s income would increase as the economy recovered. Additionally, the trial court questioned some of husband’s deductions claimed on his tax returns as business expenses. A trial court has discretion to determine whether or not claimed expenses should be deducted from gross income in determining support obligations.
In a Lake County, Ohio recent case, the reviewing court upheld the trial court’s allowance of only 50% of claimed expenses when they were clearly partially personal. There must be independent evidence that claimed expenses are necessary business expenses. A tax return alone is insufficient.
It should be evident that calculations of income for support purposes is not a simple matter.