Parents in Pennsylvania who are divorcing might wonder how child support is determined. One of the major factors in determining child support is income.
Courts tend to define income broadly. This means that in addition to wages, benefits such as workers' compensation or any employment perks that reduce living expenses such as the company car or reimbursed expenses may be considered income.
Some sources of income are decided on a state-by-state basis. "Unrealized income" is the name for income that technically exists but has not been paid out. For example, in Ohio, a court ruled that the potential income from stock options counted toward assessing child support amounts even if the options were not cashed in. Other states vary in their rulings regarding interest from IRAs that is reinvested into the account, retained earnings from a business, trust income and capital gains received from stock transactions.
A parent whose marriage is ending may wish to consult an attorney about issues regarding child support and custody. An attorney may be helpful in ensuring that a child receives the needed support while also protecting the parent. While parents may come to an informal agreement about custody and visitation as well as support, a formal legal arrangement allows either to turn to the courts for remedy if one parent does not fulfill the terms of their agreement. For example, if a parent does not pay the agreed-upon amount, the other parent has various options available to try and collect child support. A legal arrangement also provides a framework for modifying child support if necessary. For example, if one of the sources of income used in the original arrangement changes, a parent may be unable to pay the same amount and may need to seek a modification.