What Income Counts for California Child Support

By the FigureMyTax Editorial Team · How we calculate

California counts income from whatever source derived, then subtracts the deductions in Family Code 4059, such as taxes, FICA, mandatory union dues and retirement, health insurance and support paid under court order, to reach net disposable income. A court can consider earning capacity, but incarceration is not voluntary unemployment.

Annual gross income

Under Family Code 4058, a parent’s annual gross income means income from whatever source derived. It includes commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation, unemployment and disability insurance benefits, Social Security benefits, severance pay, veterans benefits that are not need-based, military allowances for housing and food, and spousal support received from a person who is not a party to the case.

Business income and benefits

Income from the proprietorship of a business is gross receipts reduced by the expenditures required to operate the business. In the court’s discretion, employee or self-employment benefits can count too, taking into account the benefit to the employee and any corresponding reduction in living expenses (Section 4058(a)(2) and (a)(3)).

What is excluded

Gross income does not include child support actually received or income from a public assistance program whose eligibility is based on need. Child support received for children from another relationship is not part of a party’s gross or net income (Section 4058(c)).

From gross to net disposable income

The guideline uses net disposable income, computed by deducting from annual gross income the actual amounts for: state and federal income tax liability (those actually payable, reflecting the parent’s tax status and dependents); FICA or its equivalent used to secure retirement or disability benefits; mandatory union dues and retirement required as a condition of employment; health insurance premiums for the parent and the children the parent must support, and state disability insurance; child or spousal support actually paid under a court order to or for someone who is not part of the case; job-related expenses the court allows; and a hardship deduction (Section 4059).

Spousal support

Unless the parties stipulate otherwise, the tax effects of spousal support are not considered in determining net disposable income for child support (Section 4059(a)). For allocating child care and health add-ons, the paying parent’s gross income is decreased and the receiving parent’s increased by the spousal support while it is paid (Section 4061(c)). The California spousal support calculator covers how long spousal support can last.

Documents that prove income and deductions

Pay stubs, W-2s and 1099s, the last tax returns, business profit-and-loss statements for the self-employed, proof of health insurance premiums and records of any support paid under court order are the usual evidence. A deduction for support paid for others requires proof of payment under Section 4059(e).

Earning capacity

When a parent’s income is unknown, the court shall consider earning capacity; when it is known, the court may consider earning capacity instead, consistent with the children’s best interests and the time the parent spends with them. The court weighs the parent’s assets, residence, employment and earnings history, job skills, education, literacy, age, health, criminal record and other employment barriers, record of seeking work, the local job market, available employers and prevailing earnings. Incarceration or involuntary institutionalization is not treated as voluntary unemployment (Section 4058(b)).

Frequently asked questions

Official sources

• Family Code 4058: annual gross income
• Family Code 4059: net disposable income
• Family Code 4061: allocation of additional support

This is general information, not legal advice. It is based on the cited California statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed California attorney.