If there is no actual Imputed Income Law And Legal Definition experience, or if the actual family experience is not in the best interest of the child, the judicial officer shall determine a reasonable child care expense based on the cost of child care from a licensed source. If the primary residential parent chooses child care with an actual cost that is less than the level required to provide child care from a licensed source, the judicial officer shall use the actual child care expense to calculate the child support obligation.

An example of imputed income in connection with personal services is the situation where a stay at home parent is not taxed on wages that the family implicitly “pays” them for their services. If they were working for compensation, the wages they might pay a hired employee would be taxed. This is a systemic unneutrality that is inevitable in any income tax; the tax favors “leisure” (including self-rendered benefits such as shaving and mowing one’s own lawn) over “work” . The concept of imputing income is logically extensible to any service people perform for themselves, such as cooking their own meals, washing their own laundry, or even bathing themselves.

What If the Other Parent Is Intentionally Not Making Efforts to Find Employment?

Imputed income is adding value to cash or non-cash employee compensation to accurately withhold employment and income taxes. Basically, imputed income is the value of any benefits or services provided to an employee. And, it is the cash or non-cash compensation taken into consideration to accurately reflect an individual’s taxable income.

The Vargas case stands for the presumption that a party that is in prison has no opportunity to work and therefore attributing an imputed income to that spouse would be reversible error. When going through a divorce, you will be confronted with many terms that are unfamiliar but your understanding of them may be crucial to your case. Your Florida Divorce Attorney of course will be able to explain in detail the critical portions and terms of your divorce, and having their legal expertise in these areas is invaluable. One of the most common misunderstood or unknown terms is imputed income. In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual’s own acts or omissions.

Imputing Income for Child Support

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If the court finds a parent owing child support has “voluntarily impoverished” themselves, the court may “impute income” to the parent. This means that the court will act as if the parent has an income when determining the child support payment.

What is imputed income?

A vocational evaluator may also be employed to establish what similar individuals involved in the same business or industry earn as further support for the court to impute a self-employed party additional income. The deduction for depreciation has been a hotly contested issue throughout jurisdictions around the country.

Stock that is kept as stock and not liquidated is likely not going to invoke an imputation of income, except to the extent the court wishes to assess a rate of return for other reasons. DisclaimerAll content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. This is an optional tax refund-related loan from Pathward, N.A.; it is not your tax refund. Approval and loan amount based on expected refund amount, eligibility criteria, and underwriting. If approved, funds will be loaded on a prepaid card and the loan amount will be deducted from your tax refund, reducing the amount paid directly to you. Personal state programs are $39.95 each (state e-file available for $19.95).