Net Income

For the purposes of determining child support, “net income” is the “total of all income from all sources” minus the statutorily defined deductions. 750 ILCS 5/505(a)(3). The concept of “net income” is clearly and intentionally broader than simply wages or earnings, though for many parents there is no practical difference between the two. Note, however, that §15 of the Income Withholding for Support Act, 750 ILCS 28/1, et seq., also has an even broader definition of “income.”

Interpreting IMDMA §505(a)(3), Illinois courts have held that “income” includes passive income from bonds or other securities but excludes passive income that is reportable on a personal income tax return but is not actually received by the party. In re Marriage of Marmon, 210 Ill.App.3d 92, 568 N.E.2d 948, 154 Ill.Dec. 727 (2d Dist. 1991) (Unearned income is included in net income, but gifts are not and neither are interest payments received from investment of non-custodial mother’s share of marital estate received from custodial father at time of dissolution); In re Marriage Dodds, 222 Ill.App.3d 608, 164 Ill.Dec. 692 (2d Dist. 1991) (net income includes workers’ compensation award); In re Marriage of DeGironemo, 206 Ill.App.3d 1019, 565 N.E.2d 189, 151 Ill.Dec. 918 (1st Dist. 1990) (potential recipient support, who has burden of proving amount to which guidelines should be applied, cannot complain about award given proof in record of potential payor’s income); In re Marriage of Butler, 106 Ill.App.3d 831, 436 N.E.2d 561, 62 Ill.Dec. 535 (1st Dist. 1982) (applying IMDMA §505 to non-custodial mother’s income, which consisted only of commissions). Compare In re Marriage of Partney, 212 Ill.App.3d 586, 571 N.E.2d 266, 270, 156 Ill.Dec. 679 (5th Dist. 1991) (citing Ivanyi v. Granoff, 171 Ill.App.3d 411, 526 N.E.2d 189, 197, 122 Ill.Dec. 49 (2d Dist. 1988), for proposition that Internal Revenue Code’s definition of “net income” is not dispositive for purposes of IMDMA §505(a)(3)). Ivanyi also noted that the plaintiff, the mother, had the burden of presenting evidence to the court regarding the father’s income.

The support payor’s net income is to be determined based on the latest available income tax return or other more recent and reliable data, and a court cannot base a child support award on a “weighted average” of the supporting spouse’s income. In re Marriage of Schroeder, 215 Ill.App.3d 156, 574 N.E.2d 834, 158 Ill.Dec. 721 (4th Dist. 1991). In Schroeder, 574 N.E.2d at 837, the appellate court held that the trial court erred in averaging the father’s income over the past six years to determine the amount of support and instead should have based its support ruling on the income figures shown on the latest income tax return unless there was more recent reliable data of an economic reversal. However, when the current information is changing or uncertain, “a court may properly consider past earnings.” Marriage of Butler, supra, 436 N.E.2d at 565. See also In re Marriage of Elies, 248 Ill.App.3d 1052, 618 N.E.2d 934, 188 Ill.Dec. 364 (1st Dist. 1993)(upon finding that husband and his father manipulated husband’s income in year of support hearing to reflect drastic reduction, trial court properly averaged husband’s income for previous three years in determining his available income for maintenance and child support); In re Marriage of Garrett, 336 Ill.App.3d 1018, 785 N.E.2d 172, 271 Ill.Dec. 521 (5th Dist. 2003) (modification case reiterating that income averaging may be applied in any case when it is appropriate, and there does not need to be wild fluctuation before averaging may be applied).

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