You probably know that when a New Jersey court determines alimony, it will look to the income of the parties to determine what the alimony payment will be. But what is income? That sounds like a silly question, but people have all kinds of ways of making money. What kind of income counts when calculating each party’s alimony obligations?
Note that alimony in New Jersey is calculated based on both spouses’ gross income–not net income. There is also no set formula that you can just plug income figures into to determine alimony, the way that there is with child support.
Sources of Income
The obvious source of income is your salary or payment from your primary source of employment. That includes bonuses, overtime payments, unemployment payments, commissions, rents from properties, or royalties — income that is not always consistent or guaranteed.
When income fluctuates, such as in the case of commissions or bonuses, courts will usually take an average of what was received in the previous three to five years to come up with an income figure. But that can create difficulties, as an average does not mean that the paying spouse will actually have that income from year to year.
When this happens, the parties may want to agree on income figures that only include regular, base income, although it will yield a lower alimony figure, it will eliminate the need for fighting or the chance of parties claiming they cannot pay alimony in a given year because the inconsistent income is not there on a given year. Then, they can add a percentage of the bonuses or commissions to the base alimony amount.
Money or assets from a trust also count (although many people think that getting money from a trust somehow “hides” that income).
Government benefits count, such as disability benefits or social security benefits (although for many, where this is the only source of income, the recipient may not earn enough to even have to pay alimony–but the income still counts).
Even money earned from gambling will count.
Businesses and Non-Liquid Assets
If income is from a business, anything the business receives as profit may also count as income for alimony purposes, but the recipient is allowed to deduct costs for the necessary operating expenses of the business. Courts will often look at the average income of a business over time, so purposely lowering a business’ revenue to avoid paying alimony usually will not work.
Even non-liquid income can be considered. For example, someone may have an appreciation of the value of real estate holdings; that profit can also be considered income even though it is not readily and immediately available.
Imputation of Income
Note that you cannot purposely unemployed or underemployed yourself just to lower your income temporarily, to pay a lesser alimony figure. The court will impute (assume) an income figure for you based on your experience, prior income, age, and other factors.
What can you expect in your New Jersey divorce? Contact our New Jersey family law attorneys at The Law Office of Agnes Rybar LLC today for help.
Sources
https://www.divorcenet.com/states/new_jersey/new_jersey_alimony_part_1
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