Imputing Income for Child Support in Arizona

A look at the process of imputing income in Arizona and how it impacts child support.

In Arizona, both parents are legally responsible for the financial support of their children. This duty applies to children born in or out of marriage and applies to adopted children as well. If parents separate or divorce, they may not be able to agree on who should pay child support: In such cases, a court may need to set the amount of support.

Parents’ incomes are a key factor in figuring out how much support is owed. Unfortunately, some parents intentionally reduce their income in order to avoid their duty of support - they may do this by cutting back work hours or refusing to work altogether.

In Arizona, if a court determines that a parent is reducing income to avoid support, a judge may impute additional income to that parent. This article will explain why and how courts will attribute or “impute” income for child support. If you still have questions after reading this article, you should contact an experienced family law attorney for advice.

Overview of Child Support Orders

A court order is the only way to establish an enforceable child support obligation. A parent, a parent’s attorney, or the Arizona Division of Child Support Services may file a child support case on behalf of a child. It is also important to note that custody and paternity issues must be resolved before the court will deal with child support.

To calculate child support, Arizona courts use the Income Shares Model. Under this model, the court will look at the income of both parents and use the Arizona child support guidelines to set the amount.

The parent who does not have primary custody (“noncustodial parent”) is the one who will be responsible for paying child support to the other parent. The total amount of support will be similar to the amount that would have been spent on the children if the parents were living together.

A parent will owe child support until the child turns 18, or until the child graduates high school or turns 19, whichever comes first. For more information on enforcing child support orders in Arizona, click here.

Imputing Income for Child Support

Although most noncustodial parents have no problem making child support payments for their children, some will do anything to avoid their obligations. If a parent attempts to shirk his or her duty of support by quitting a job or voluntarily reducing work hours to artificially lower income, a judge may hold that parent accountable by "imputing" additional income.

Imputed income is income that is attributed to a parent who has reduced his or her earnings by choice and not for a reasonable cause. In these cases, the court will typically impute income equal to the noncustodial parent’s earning capacity, but the court will first need to determine whether the reduction in income was involuntary or voluntary.

Involuntary Unemployment

A parent is involuntarily unemployed when he or she is unable to work due to to a job loss followed by the inability to find another job - despite good faith efforts. The parent must be prepared to show evidence of diligent efforts to find another job.

The court will not impute income when a parent is:

  • involuntarily unemployed
  • physically or mentally disabled
  • participating in a reasonable career or job training intended to establish basic skills or reasonably calculated to increase earning capacity
  • at home with a child who has unusual emotional or physical needs, or
  • a current recipient of Temporary Assistance to Needy Families (TANF).

Voluntary Unemployment and Underemployment

Voluntary unemployment or underemployment are when a parent has voluntarily quit his or her job or has voluntarily reduced his or her earnings without a reasonable cause. In these cases, courts are more likely to impute income.

In deciding if a parent is voluntarily unemployed, the court will look at the parent’s efforts to find another job or to resolve the problems that caused the parent to lose the most recent job, such as substance abuse issues or certification noncompliance.

With voluntary underemployment, the court will look at recent work history and employment qualifications to decide if a parent is working below full capacity. The court will also look at the financial impact of underemployment on the child. A parent's failure to reasonably use or invest his or her assets may also result in a finding of voluntary underemployment.

If a parent has a reduction in earnings that is voluntary but reasonable, the court will balance the parent’s decision to reduce income against the impact the reduction has on the child’s best interest - this balancing method is called the “intermediate balancing test.” Depending on the unique facts of the case, the court will decide if income should be imputed and, if so, how much.

If the parent is working below his or her potential, but has a good reason (such as education or training), then the court will apply the “intermediate balancing test.” In cases where a parent is returning to school, the court will look at the following factors to decide whether to impute income:

  • the reasonableness of the parent’s decision
  • the parent’s current education level and physical capacity
  • whether the training is likely to increase the parent’s earning potential
  • the length of the training or education, and
  • whether the parent is able to pay for the education and the child support obligation.

The court may decide not to impute income if the parent is seeking training that will enhance the parent’s job skills or earning capacity. However, if the parent's lower income puts the child in significant financial hardship due to lowered child support payments, the court won't impute income.

How Courts Determine the Amount of Income to Impute

If a parent is found to be working below his or her potential, and has no reasonable cause, the court will usually impute income up to the parent’s "full earning capacity."

To determine full earning capacity, the court will consider evidence of the following:

  • the parent’s former earning level or annual income (w-2s, tax returns and pay stubs)
  • local or regional salaries paid for jobs that are comparable to the parent’s most recent job
  • prevailing wage rates in the region, and
  • in some cases, where the court cannot determine earning capacity, the court may impute minimum wage.

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