Imputing Income for Child Support in South Dakota

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

Both parents of minor children are legally obligated to financially support their children. When parents of minor children break up or divorce, the noncustodial parent (the parent with less parenting time) typically provides financially support to his or her children by paying child support to the custodial parent.

The laws of each state determine how child support is calculated, but generally speaking, courts use the income of each parent to determine what the noncustodial parent should pay to the custodial parent in child support. Most parents will continue work hard to earn income to be able to properly support their children, but sometimes a noncustodial parent will purposely become unemployed or take a lower paying job to avoid paying child support to the custodial parent. In these cases, the court may choose to base child support on the noncustodial parent’s potential income rather than his or her actual income. This process is called “imputing income.”

This article explains how South Dakota courts impute income in child support cases. If you have additional questions about imputed income in South Dakota after reading this article, you should speak with a local family law attorney.

Overview of Child Support in South Dakota

In South Dakota, courts use a child support worksheet to determine how much child support the noncustodial parent should pay to the custodial parent. First, the parents’ net incomes are combined to calculate how much money is available to support the children. The court then orders the noncustodial parent to pay child support to the custodial parent roughly based on the percentage of the combined income available for child support that the noncustodial parent earns. South Dakota courts use several factors to calculate the final child support amount:

  • the net income of each parent, including salary, wages, regular commissions and bonuses, unemployment or social security benefits, rents and other sources of income
  • the cost of health insurance for the children
  • the time each parent has custody of the children
  • child support a parent must pay for other children
  • special needs of the children
  • financial hardship of either parent
  • voluntary unemployment or underemployment of either parent.

To read more about the specifics of child support calculation, see Child Support Laws in South Dakota. Also, see theSouth Dakota Child Support Guidelines and Child Support Handbook. Courts can also deviate from the child support guidelines based on the circumstances of each case. For example, when a noncustodial parent’s income increases, the court can increase the child support amount that parent pays. When a noncustodial parent’s income decreases, the court may lower child support, but is likely to look into the reasons that parent’s income decreased before doing so.

What is Imputed Income?

When determining child support, South Dakota courts don’t have to accept the income a parent claims to earn. When a parent is earning income below his or her earning capacity (potential income), the court may opt to use potential income rather than actual income when calculating child support; this is called imputing income. While the court won’t impute income for a parent who truly has trouble finding income up to his or her potential, the court won’t let a parent purposely lower a child support payment by being voluntarily unemployed or underemployed.

The Important Difference Between Voluntary and Involuntary Unemployment

Courts impute income when calculating child support to prevent a parent from escaping child support by purposely earning less income, but imputed income is not intended to punish parents who are unemployed or underemployed due to no fault of their own. In South Dakota, courts don’t impute income automatically when a parent leaves a job voluntarily, unless that parent quit his or her job specifically to reduce income.

South Dakota courts will first try to determine whether a parent’s unemployment or underemployment is voluntary or involuntary. Involuntary unemployment or underemployment includes the following circumstances:

  • a parent can’t work because of a physical or mental disability
  • a parent can’t work because that parent must take care of a child with physical or mental disability
  • a parent is laid off from work or otherwise involuntarily lost a job, or
  • a parent is diligently seeking employment but hasn’t been able to find a job that pays up to his or her potential.

When a parent’s unemployment or underemployment is involuntary, the court will use that parent’s actual income to calculate child support.

If a parent voluntary leaves a job, South Dakota courts will then determine if the purpose was to reduce income to avoid support. For example, with a parent who quits a job and makes no effort to find another job without one of the above reasons, the court may decide to impute income. On the other hand, the court won’t impute income to a parent who quits a job to move into another field where that parent may eventually be able to earn higher income. For example, when a parent who leaves a job as a paralegal to go to law school and eventually earn higher income, the court is unlikely to impute income to that parent.

South Dakota courts have also refrained from imputing income to a parent who moved to a different city to be with a new spouse and was unable to find work that paid the same income previously earned. In cases where the paying parent voluntarily leaves a job, but not specifically to reduce income, the courts will use the paying parent’s actual income to calculate child support.

If a parent loses employment, but purposely did something to get fired, the court will impute income to that parent. For example, if a parent stops showing up to work and gets fired, the court may still impute the income that parent was earning before getting fired for child support purposes.

How Does South Dakota Calculate Imputed Income?

When calculating imputed income in South Dakota, the courts presume that every parent, unless mentally or physically disabled, earns at least the state minimum wage, while being employed full-time. At the time of this article, the South Dakota state minimum wage is $7.25. South Dakota courts impute income at a minimum of $7.25 per hour for 40 hours per week, even if the parent paying child support is incarcerated.

In addition to setting imputed income no lower than what a parent could earn working full-time and earning minimum wage, South Dakota courts use a number of other factors to calculate the amount of imputed income to use in child support calculations:

  • the paying parent’s current income
  • the paying parent’s previous income
  • the paying parent’s work history
  • the paying parent’s job training and education
  • income earned by individuals in the area with similar education or job skills
  • other sources of income, including unemployment benefits, worker’s compensation benefits, pensions and retirement programs, and
  • any other factors that affect the paying parent’s potential income.

After considering all of the above factors to determine a parent’s imputed income, South Dakota courts will use that amount in the child support worksheets to determine the paying parent’s child support payment.

Resources

If you have additional questions about imputed income in South Dakota, you should speak with a local family law attorney.

To read the full text of the law on determining child support in South Dakota, read the South Dakota Codified Laws Chapter 25-7.

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