Child support and maintenance (formerly known as alimony) in Illinois are determined by both parties’ incomes. A business owner does not receive just a check every two weeks and a W2. A business owner has ongoing revenue and expenses that have to be calculated to determine the business owner’s income. Beyond that, business owners have future income and expenses in the form of accounts receivable and accounts payable. Some of these sources of income and some of these expenses are under the control of the lawyer…and some are not. How does one accurately determine a business owner’s income in an Illinois divorce. To further complicate the matter, for business owners, it is always feast or famine: business is either booming or business is collapsing. When a business owner is getting a divorce, the business suffers. More importantly, a business owner who may be liable for support will be greatly incentivized to portray his income as struggling. How does a business owner prove his income is legitimate? Conversely, how does a business owner’s spouse or co-parent prove a business owner’s income is being manipulated by the business owner? How Is Support Calculated In An Illinois Divorce Or Parentage Action Maintenance and child support are both determined based on the net income of both parties. “Maintenance…shall be calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income…[not to exceed] 40% of the combined net income of the parties.” 750 ILCS 5/503(b-1)(1)(A) “The court shall compute the basic child support obligation by taking the following steps:(A) determine each parent’s monthly net income;(B) add the parents’ monthly net incomes together to determine the combined monthly net income of the parents;(C) select the corresponding appropriate amount from the schedule of basic child support obligations based on the parties’ combined monthly net income and number of children of the parties; and(D) calculate each parent’s percentage share of the basic child support obligation.” 750 ILCS 5/505(A)(1.5) In an Illinois divorce or parentage action, for the purposes of support, net income is not just the money left over after taxes. “[I]n determining appropriate child support, we are not bound by the technicalities of federal income tax law.” In re Marriage of Ackerley, 333 Ill. App. 3d 382, 392 (Ill. App. Ct. 2002) Rather, “net income” for the purpose of support is calculated by determining the gross income of the parties. The Illinois […]
