What Counts as Income for Child Support in San Jose? Bonuses, RSUs, and More

In an area where stock compensation, performance bonuses, and freelance income are commonplace, calculating child support in San Jose is rarely straightforward. If you are going through a divorce or separation, understanding what the court counts as income can significantly affect the amount ordered, whether you are paying or receiving it.

Our experienced San Jose child support lawyer helps clients in Silicon Valley navigate the complexities of income calculation, especially when compensation exceeds a standard salary. Find out what counts for support income in California and how courts handle these calculations.

What the Santa Clara County Court Considers As Income for Child Support Purposes

Under Section 4058 of the California Family Code, the Santa Clara County Family Court looks beyond a parent’s base salary when calculating child support payments. Any of the following may count as income:

• Salary, hourly wages, and tips from your current employer.
• Any signing bonuses, performance bonuses, or other incentive pay.
• Restricted stock units, or RSUs, are once vested and received.
• Stock options exercised during the relevant calculation period.
• Freelance, consulting, or self-employment income after allowable business deductions.
• Rental income from investment properties.
• Dividend and interest income from investments and savings accounts.
• Unemployment benefits, disability payments, and workers’ compensation.

Judges in the Santa Clara County Family Court consider a parent’s earning capacity as well as actual income. If a parent voluntarily reduces their hours or leaves a higher-paying job, a judge may attribute income to that parent based on what they are capable of earning.

Including Variable Compensation in San Jose Child Support Calculations

Bonuses, RSUs, and other forms of variable compensation raise specific challenges. They fluctuate, so judges in Santa Clara child custody proceedings typically average these types of income to get a fair monthly figure.

When variable compensation is part of the income picture, parents and their lawyers should be prepared to:

• Provide several years of tax returns to establish an accurate income average.
• Document the vesting schedules for any outstanding RSUs or stock options.
• Disclose employer compensation statements that break down base pay versus variable pay.
• Account for the tax consequences of RSU vesting, including their impact on the actual take-home value.
• Address any anticipated changes in compensation, such as a promotion or job change.
• Work with a financial professional if business income or complex investments are involved.

Accurate and complete income disclosure from both parents is essential to calculating a fair support order. Incomplete disclosure can lead to support amounts that do not reflect reality and may require costly modifications down the road.

Speak With Our Experienced San Jose Child Support Lawyer

In San Jose’s high-earning economy, child support calculations can get complicated fast. At Argyris Mah, LLP, our experienced San Jose child support lawyer understands how courts treat bonuses, RSUs, and other forms of variable compensation and fights to ensure the support order accurately reflects both parents’ financial situations. To request a consultation, contact our office today.

Source:

leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=4058