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Gross income is what the child support calculation is based on. However, there are several factors that play into what is considered gross income for the purposes of calculating child support in Georgia.
Gross income means all income from any source, whether earned or unearned. There are certain adjustments that may be made to gross income to reduce it. These adjustments are made under the following circumstances: 1) a party is self-employed, 2) there are preexisting child support orders, and 3) there are other qualified children residing with a party. See O.C.G.A. § 19-6-15(f)(1)(A)(vi) et seq. For the purposes of a child support worksheet, gross income for each parent should be calculated on a monthly basis and must include, but is not limited to, income from the following sources:
- Commissions, fees and tips;
- Income from self-employment;
- Overtime payments;
- Severance pay;
- Recurring income from pensions or retirement plans including, but not limited to, Veterans’ Administration, Railroad Retirement Board, Keoghs, and Individual Retirement Accounts;
- Interest income;
- Dividend income;
- Trust income;
- Income from annuities;
- Capital gains;
- Disability or retirement benefits that are received from the Social Security Administration;
- Worker’s compensation benefits, whether temporary or permanent;
- Unemployment insurance benefits;
- Judgments recovered from personal injuries and awards from other civil actions;
- Gifts that consist of cash or other liquid instruments, or which can be converted to cash;
- Lottery winnings;
- Alimony or maintenance received from persons other than parties to the proceeding before the court;
- Assets which are used for the support of the family; and
- Other income.
See O.C.G.A. § 19-6-15(f)(1)(A) et seq.
Practice Pointer - What is Not Considered Gross Income?
There are also several categories of “income” that are not considered gross income for purposes of calculating child support. These exclusions are:
- Child support payments received by either parent for the benefit of a child of another relationship.
- Benefits received from means-tested public assistance programs.
- Foster care payments paid by the Department of Human Services or a licensed child placing agency.
- A nonparent custodian’s gross income.
For more information and some examples of what is not considered gross income, please visit our page on what is excluded from gross income.
According to Georgia law:
Income from self-employment includes income from, but not limited to, business operations, work as an independent contractor or consultant, sales of goods or services, and rental properties, less ordinary and reasonable expenses necessary to produce such income. Income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership, limited liability company, or closely held corporation is defined as gross receipts minus ordinary and reasonable expenses required for self-employment or business operations. Ordinary and reasonable expenses of self-employment or business operations necessary to produce income do not include: 1) Excessive promotional, travel, vehicle, or personal living expenses, depreciation on equipment, or costs of operation of home offices; or 2) Amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court or the jury to be inappropriate for determining gross income.
O.C.G.A. § 19-6-15(f)(1)(B). If a parent is self-employed, an amount will be deducted from that parent’s gross income for one-half of the amount of any applicable self-employment and Medicare taxes being paid by that parent. O.C.G.A. § 19-6-15(f)(5)(A).
Adjusted Gross Income
In addition to deductions made for self-employment related taxes, there are two adjustments that may be made to a parent’s gross income for the purposes of a child support worksheet that may reduce that parent’s gross income: 1) a pre-existing child support order, and 2) the presence of other qualified children in that parent’s residence. O.C.G.A. § 19-6-15. If a parent is currently paying child support in accordance with a child support order entered prior to the initiation of the current action, that parent may receive a credit for such payments in the form of a reduction of his or her income on the child support worksheet. The maximum credit allowed is an average of the amount of current child support actually being paid under the preexisting child support order over the past 12 months prior to the current divorce or child support action. O.C.G.A. § 19-6-15(f)(5). Payments made by a parent on arrearage amounts may not be credited to that parent for the purposes of reducing his or her income for child support calculation purposes. Id.
A parent’s income may also be reduced, for child support calculation purposes, if that parent is currently caring for and supporting another child who resides with that parent. O.C.G.A. § 19-6-15(f)(5)(c). The purpose of this adjustment is to ensure that any child support order rendered as a result of the proceedings does not cause the parent seeking the adjustment substantial hardship in caring for either child. Id.
Fringe benefits and variable income are other sources of income that are included in the gross income calculation for the purpose of Georgia’s child support worksheet. Fringe benefits received by a parent in the course of his or her employment in operation of a trade or business will be counted as income if the benefits significantly reduce that parent’s personal living expenses. Examples of these types of fringe benefits include, but are not limited to, use of a company car, housing, or room and board. The financial benefit of these items reduces the amount of money the recipient parent would otherwise have to expend for them. O.C.G.A. § 19-6-15(f)(1)(C).
Variable income includes commissions, bonuses, overtime pay, and dividends. If either parent receives variable income such as this, the court presiding over the case will average the income in a way that is reasonable under the circumstances of the case and add the averaged amount to the parent’s fixed salary or wages to determine gross income. O.C.G.A. § 19-6-15(f)(1)(D). However, if the income is received on an irregular or one time basis, the court may, but is not required to, order the parent to pay a percentage of the variable income to the custodial parent as a one-time support amount. Id.