What Counts as Income for Child Support? (Salary, Bonuses, Business, and More)

In U.S. family law, income for child support includes nearly every financial resource a parent receives, not just wages or salary. When a family court sets a child support amount, the first question isn’t how much the obligor earns from their job — it’s how much income they have from every source. Courts do not limit child support income to paychecks alone. Income can come from investments, rental property, disability benefits, or business profits — not just a paycheck.

This article covers every major income category courts consider across the United States, explains which income sources are excluded and why, and walks through how different states approach the income definition differently. If you’re trying to understand how child support is calculated in the United States, the income definition is where that calculation starts.

What Is Considered Income for Child Support Purposes?

Every U.S. state operates under child support guidelines required by Title IV-D of the Social Security Act. Those guidelines must include a specific method for determining income, per 45 C.F.R. §302.56. States have latitude in exactly how they define income, but the child support income definition used by courts is intentionally broad when determining gross income for child support.

Income for child support purposes includes significantly more than a W-2. Courts in every state include wages, salary, overtime, bonuses, commissions, tips, self-employment income, rental income, interest and dividends, pension and retirement benefits, Social Security (with one key exception), disability payments, workers’ compensation, unemployment compensation, and spousal support received from a prior relationship.

The definition is intentionally broad so courts can capture every financial resource a parent actually has available. A parent who earns $50,000 in salary and another $20,000 in rental income doesn’t have $50,000 in resources — they have $70,000. Courts follow the money, whatever form it takes.

Does Overtime Count as Income for Child Support?

Yes. Overtime pay is income for child support purposes in every state. It appears explicitly in several state statutes. Texas Family Code §154.062 includes “100 percent of all wage and salary income and other compensation for personal services (including commissions, overtime pay, tips, and bonuses)” as net resources. Florida Statute §61.30 explicitly lists bonuses, commissions, allowances, overtime, and tips as gross income. Wisconsin’s Admin. Code DCF 150.02(13) covers “all income whether taxable or not,” which includes overtime.

Courts generally take overtime income into account by looking at what the parent actually receives. If the obligor has worked substantial overtime consistently for two years, courts typically include it. If overtime was a one-time event, courts may exclude or average it. The analysis looks at actual and consistent patterns of income, not just what the employment contract says.

Do Bonuses and Commissions Count as Income for Child Support?

Yes. Bonuses and commissions count as income in every state. More than that, when an Income Withholding Order (IWO) is in place, an employer is generally required to withhold from bonus payments just as it withholds from regular wages. The DOL Opinion Letter CCPA2018-1NA confirmed that 15 of 18 specific lump sum payment types — including bonuses and commissions — are earnings subject to the Consumer Credit Protection Act (CCPA) withholding limits. That ruling applies nationwide.

Say an obligor earns a $12,000 annual bonus on top of a $60,000 salary. That bonus is income. The employer who receives an IWO must withhold a proportional share of it when it’s paid. The obligee doesn’t have to file a motion. The money moves from the employer to the State Disbursement Unit (SDU) to the obligee automatically — just like regular paycheck withholding.

California uses Smith/Ostler orders for variable income situations. When an obligor has a base salary plus significant variable compensation — bonuses, stock options, commissions — a Smith/Ostler order sets base support at the reliable income level and applies a percentage to variable income when that income is actually received.

Does Self-Employment Income Count for Child Support?

Self-employment income counts — but courts don’t use gross revenue. The income definition for self-employed parents uses gross receipts minus ordinary and necessary business expenses. Florida Statute §61.30 states that business income means “gross receipts minus ordinary and necessary expenses required to produce income.” California Family Code §4058, as amended by SB 343, uses the same approach. Illinois uses gross income from all sources under 750 ILCS 5/505, then subtracts mandatory deductions including taxes and retirement contributions to arrive at net income.

One area courts watch carefully is accelerated depreciation. Illinois 750 ILCS 5/505(a)(3.1)(A) excludes accelerated depreciation but gives courts discretion to include non-accelerated depreciation. The principle is the same everywhere: artificial accounting deductions designed to reduce taxable income don’t automatically reduce child support income.

Cash income is also income. A parent who receives tips, side payments, or unreported cash from a business still has that income for child support purposes. If an obligor fails to disclose cash income sources, courts can subpoena bank records, conduct lifestyle analysis, and apply the imputed income doctrine — assigning income based on what the parent’s lifestyle implies they actually receive. Intentional concealment can result in civil contempt.

Does Rental Income Count for Child Support?

Yes. Rental income is included in every state’s income definition. Like self-employment income, courts use net rental income — gross rent receipts minus ordinary and necessary operating expenses. That means mortgage interest, property taxes, insurance, repairs, and management fees may be deducted. The obligor cannot, however, treat a rental property as a loss center by loading it with depreciation or accelerated deductions that artificially suppress the income it actually produces.

Take a situation where a parent owns a rental property generating $2,000 per month in rent, with $800 in actual operating expenses. That parent has $1,200 per month in rental income for child support purposes. If that same parent tries to deduct large paper depreciation losses to bring rental income to zero on paper, courts in most states will disregard those accounting adjustments and use the actual economic income.

Does Disability Income Count for Child Support?

Most disability benefits count as income for child support. Courts across all states distinguish between types of disability income, but the general rule is clear: if it replaces wages or provides regular financial support, courts include it.

Social Security Disability Insurance (SSDI) is included. SSDI is earned through a work history — you pay into Social Security, become disabled, and receive benefits based on your earnings record. It counts as income in every state that has been confirmed, including under Texas Family Code §154.062, California Family Code §4058, and Florida Statute §61.30.

Employer-based short-term or long-term disability policies are also income. Workers’ compensation disability benefits that replace lost wages are income. VA disability benefits are income in Texas (with one exception discussed below).

The universal exclusion is SSI — Supplemental Security Income. SSI is not the same as SSDI.

Does Social Security Count as Income for Child Support? (SSI vs. SSDI)

This is one of the most misunderstood points in child support law. The answer depends on which Social Security program you’re talking about.

SSDI — Social Security Disability Insurance — counts as income. So does Social Security retirement income. Both are included in the income definitions of every state analyzed in this article.

SSI — Supplemental Security Income — does not count. SSI is a needs-based federal benefit for people who are disabled, blind, or elderly and have limited income and resources. It is excluded from child support income calculations. SSI benefits generally cannot be garnished for child support under federal law; 42 U.S.C. §407 prohibits their assignment or transfer. This exclusion is confirmed by statute in Texas, Florida, California, Wisconsin, and New York — and applies consistently across states.

The confusion is understandable because both programs involve the Social Security Administration. The distinction is fundamental: SSDI is earned. SSI is need-based. Courts count the former. They don’t count the latter.

One edge case worth noting: when a parent receives SSDI and their dependent child also receives derivative Social Security benefits based on the parent’s record, some states (including Texas and Florida) count those child payments as part of the obligor parent’s income or credit them against the support obligation. The mechanics vary by state.

Does Workers’ Compensation Count as Income for Child Support?

Workers’ compensation income that replaces lost wages is generally included in child support calculations. The key phrase is “replaces lost wages.” Courts look at the functional purpose of the payment.

The analysis gets specific in Wisconsin. Under DCF 150.02(13), the portion of workers’ compensation intended to replace wages is included in gross income for purposes of establishing the support order. The portion not intended to replace income — such as amounts compensating for permanent partial disability or future medical expenses — is excluded from the gross income calculation when setting the order. However, the full workers’ compensation benefit is assignable for collection purposes. That’s a meaningful distinction: what the court counts to set the number is different from what can be attached to collect it.

Florida takes a simpler approach: Florida Statute §61.30 includes “all workers’ compensation benefits and settlements” as gross income, without the wage-replacement distinction that Wisconsin applies.

What Income Is Excluded from Child Support Calculations?

Not everything a parent receives counts as income for child support purposes. Common exclusions across most states include:

SSI benefits — excluded by statute in confirmed states including Texas, Florida, California, Wisconsin, and New York.

Means-tested public assistance — TANF, SNAP (food stamps), Medicaid, Medi-Cal, and similar programs are excluded. The design rationale: these programs exist to meet minimum subsistence needs and are not available resources that can be redirected to child support.

Foster care payments — excluded in states including Wisconsin, which specifically excludes foster care and kinship care payments per DCF 150.02(13)(a)10.

Child support received — in most states, child support a parent receives for children from a prior relationship is not counted as income in the current proceeding. California Family Code §4058(c) expressly excludes it. Note that this exclusion may derive from guideline interpretation or case law in some states rather than explicit statutory text — it is not a universal statutory rule, but it reflects the prevailing approach.

Non-service-connected VA disability pension — Texas draws a specific line here. Texas Family Code §154.062 includes VA disability benefits but excludes “non-service-connected disability pension benefits.” Regular VA service-connected disability compensation is income. The non-service-connected pension, which is need-based, is not.

The IRS rule on child support itself: child support payments are not taxable income to the recipient and not deductible by the obligor. The IRS confirms this — this rule has not changed, not even after the 2017 tax reforms that modified alimony treatment.

How Do Different States Define Income for Child Support?

The income definition is shaped significantly by which guideline model a state uses. There are three models in the United States: the Income Shares Model, the Percentage of Income Model, and the Melson Formula.

Under the Percentage of Income Model — used by Texas, Wisconsin, Alaska, and a handful of other states — only the obligor’s income is used. The other parent’s earnings don’t enter the formula. Texas uses net resources; Wisconsin uses gross income.

Under the Income Shares Model — used by roughly 40 states including California, Florida, New York, and Illinois — both parents’ incomes are combined. Each parent pays a proportional share of the guideline obligation.

The Melson Formula, used only by Delaware, Hawaii, and Montana, builds in a self-support reserve and standard of living allowance before calculating each parent’s obligation.

Here’s how the income definition plays out differently depending on where the parents live. In Wisconsin, the court uses DCF 150.035 — a straight percentage of the obligor’s gross income: 17% for one child. In Illinois, the court first calculates each parent’s net income under 750 ILCS 5/505, subtracting federal and state income taxes, FICA, mandatory retirement contributions, union dues, and health insurance for dependents, then combines both parents’ net incomes and allocates the obligation proportionally. Same country, fundamentally different math.

California’s 2024 update deserves specific attention. When SB 343 took effect on September 1, 2024, it explicitly added military housing allowances (BAH) and food allowances (BAS) to the California Family Code §4058 income definition. Most states handle military allowances through case-by-case judicial interpretation. California resolved that ambiguity by statute. For military families living in California, BAH and BAS are now expressly included in the income calculation.

Texas updated its cap in 2025. Texas Family Code §154.125 now sets the net resources cap at $11,700 per month, up from $9,200. That cap is the ceiling on which the percentage applies — 20% for one child yields $2,340/month at the cap. Above $11,700, a court may order additional support based on proven needs of the child, but the percentage formula stops there.

Tips, Capital Gains, and Other Edge Cases

A few income categories generate consistent confusion.

Tips. Tips are included as income for child support in Texas and Florida by explicit statute. Florida Statute §61.30 lists tips directly in the gross income definition. Wisconsin’s “all income whether taxable or not” language under DCF 150.02(13) would encompass tips as well. The confusion arises because the DOL’s wage garnishment guidance — applying CCPA limits — does not ordinarily classify tips as “earnings” for purposes of calculating how much of a paycheck can be withheld. That is a collection-ceiling rule, not an income-definition rule. Tips count when the court sets the amount. DOL guidance applies separately when an employer calculates the withholding ceiling on the paycheck.

Capital gains. Florida excludes nonrecurring capital gains from gross income under §61.30, but includes recurring gains. Texas includes capital gains without a nonrecurring exclusion under §154.062. New York courts have developed a “tax fiction” carve-out: gains that are reported to the IRS but not actually received in cash may be excluded in New York under the Family Court Act §413. That interpretation is specific to New York.

Stock options and RSUs. Courts in every analyzed state include stock options as income when exercised, and RSUs when vested. Delaware courts have held that exercised stock options are income analogous to a bonus, based on longstanding Delaware precedent cited in the Family Court guideline review. California uses Smith/Ostler orders to handle the timing problem — base support is set on reliable income, and a percentage of variable income applies when that income is actually received. The detailed mechanics of stock compensation for executive-income parents are covered in the High-Income Parents article.

In-kind employment benefits. New York’s Family Court Act §413 explicitly permits courts to attribute income from employment perquisites — meals, lodging, club memberships, vehicles — to the extent they reduce living expenses. California §4058 gives courts discretion to consider employee benefits in determining income. The point is practical: if an employer pays for a parent’s housing or car, that parent has financial resources they’re not reporting as cash income.

What Happens If a Parent Conceals or Understates Income?

Child support income determination isn’t based solely on what a parent self-reports. Courts have significant tools to find the actual number.

If an obligor fails to fully disclose income sources during the proceeding, courts may impute income — assigning a figure based on the parent’s earning capacity, work history, assets, and lifestyle. Bank records can be subpoenaed. Business tax returns can be required. Lifestyle analysis compares reported income to actual spending.

Withholding income information has real consequences. Courts can hold a party in civil contempt. Some states permit criminal contempt where willful concealment is proven. A court can also adjust the order retroactively from the date of the original proceeding, not just going forward.

Miss a payment once the order is in place and the math gets worse. Under the Bradley Amendment (42 U.S.C. §666(a)(9)(C)), every missed child support payment becomes a judgment against the obligor automatically — the moment the due date passes, with no court hearing required. Courts cannot go back and erase what has already accrued. A judge can modify future payments when circumstances change, but the past is locked. Arrears sit there, collecting interest in most states, until they’re paid.

If you lose your job, stop receiving a bonus, or otherwise experience a genuine income reduction, the answer is to file for modification immediately — not to stop paying. Every month that passes without a formal modification order is another month of arrears that can’t be undone.

Federal enforcement follows income wherever it goes. A federal tax refund offset can intercept federal tax refunds for certified arrears. Passport denial kicks in at $2,500 in certified arrears under federal law — that threshold is nationwide, not a state variation. License suspension authority exists in Texas (Texas Family Code §157.0085), Florida (§61.13016), and Wisconsin (Statute §767.511(6)), among others.

The CCPA wage garnishment ceiling — the federal limit on how much of an obligor’s disposable earnings can be withheld — is set at 50% to 65% depending on arrearage status and whether the obligor supports a second family. That ceiling applies nationwide.

Frequently Asked Questions

Does overtime pay count as income for child support?

Yes. Overtime is explicitly included in the income definitions of states including Texas, Florida, and Wisconsin, and falls under “all income whether taxable or not” language used broadly across Income Shares states. Courts typically look at consistent overtime history — if the parent has worked regular overtime for an extended period, courts include it. A one-time overtime event is more likely to be averaged or excluded. There is no federal rule exempting overtime from child support income; it is a standard income source in every state’s guideline framework.

Is SSI counted as income for child support calculations?

No. SSI — Supplemental Security Income — is excluded from child support income calculations in every state confirmed in this article. Federal law under 42 U.S.C. §407 also prohibits SSI benefits from being assigned or garnished. Do not confuse SSI with SSDI. SSDI — Social Security Disability Insurance — is earned through a work history and is counted as income. The distinction between these two programs is one of the most common sources of confusion in child support proceedings.

Do bonuses count toward child support?

Yes. Bonuses are income in every state and are subject to Income Withholding Orders. When a bonus is paid, the employer must withhold child support from it. The DOL Opinion Letter CCPA2018-1NA confirms that bonuses qualify as earnings under the CCPA, subject to the same withholding ceiling as regular wages. Some states — like California — use supplemental Smith/Ostler orders specifically to address variable compensation, so that base support reflects predictable income and a set percentage applies to bonuses when received.

Does rental income count for child support?

Yes. Net rental income is included in every state’s income definition. Courts use gross rental receipts minus ordinary and necessary operating expenses — mortgage interest, insurance, repairs, property taxes, management fees. Large paper depreciation deductions are typically disregarded. If a parent owns rental property, that income enters the child support calculation regardless of whether it appears on a pay stub.

Does disability income count for child support?

It depends on the type. SSDI, employer-sponsored disability benefits, and workers’ compensation that replaces lost wages all count as income. SSI does not. VA disability benefits count in Texas under Texas Family Code §154.062, with the exception of non-service-connected pension benefits. The governing principle: if the payment functions as income replacement, courts treat it as income.

Can child support be based on cash income or tips?

Yes. Cash income, tips, and unreported earnings are income for child support purposes even if they don’t appear on a tax return. Texas Family Code §154.062 and Florida Statute §61.30 both explicitly include tips in the income definition. If a parent understates cash income, courts can use bank records, lifestyle analysis, and imputed income to reach the actual number.

Do stock options count as income for child support?

Yes. Exercised stock options and vested RSUs are income in every state analyzed. Delaware courts have confirmed this based on longstanding state precedent cited in the Delaware Family Court guideline review — courts treat exercised options as equivalent to a bonus. California addresses the timing problem with Smith/Ostler orders. The deeper mechanics of executive compensation and child support belong to the High-Income Parents article.

Does child support received from a prior relationship count as income?

Generally no. Child support received for children from a prior relationship is typically excluded from the income calculation in the current proceeding. California Family Code §4058(c) expressly excludes it. In other states, this exclusion may be applied through guideline interpretation rather than explicit statutory text. The underlying rationale: that support was ordered to benefit a specific child in a prior case and is not a free resource available for redistribution.

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