Are My Savings Account Funds Considered Income for Child Support?

In the 2012 Supreme Court case of In re Marriage of McGrath, the Court held that the amount withdrawn by the father from his savings account should not be considered “income” for child support calculations because the money already belonged to the father. However, if using the statutory guidelines for child support generates an amount that the court finds inappropriate, the court can make specific findings of this and adjust the child support amount accordingly by using the factor that allows the court to consider the financial resources and needs of the parent.

In Illinois, the law defines “net income” for purposes of child support calculation, but it does not define “income”. Net income is defined as the total of all income from all sources minus several enumerated deductions. Funds that you withdraw from the savings account that already belonged to you do not increase your wealth or provide you with a “gain or a recurrent benefit” these funds as withdrawn are not income.

Illinois Supreme Court Defines Meaning of “Income”

In applying the analysis of the courts in Illinois the money in a savings account already belongs to the account owner. By withdrawing the money in the savings account it does not provide a gain or benefit to the owner of the account. The money is not coming in as an increment or addition and the account owner is not receiving money that already belongs to him.

“Gross Income” as Defined by Updated Illinois Child Support Law

“The total of all income from all sources, except “gross income” does not include (i) benefits received by the parent from means-tested public assistance programs, including, but not limited to, Temporary Assistance for Needy Families, Supplemental Security Income, and the Supplemental Nutrition Assistance Program or (ii) benefits and income received by the parent for other children in the household, including, but not limited to, child support, survivor benefits, and foster care payments. Social security disability and retirement benefits paid for the benefit of the subject child must be included in the disabled or retired parent’s gross income for purposes of calculating the parent’s child support obligation, but the parent is entitled to a child support credit for the amount of benefits paid to the other party for the child. “Gross income” includes maintenance treated as taxable income for federal income tax purposes to the payee and received pursuant to a court order in the pending proceedings or any other proceedings and shall be included in the payee’s gross income for purposes of calculating the parent’s child support obligation.”

What About Business and Self-Employment Income?

Client Victory Addressing Income for Calculating Child Support

In Tegeler, 365 Ill.App.3d at 456, 302 Ill.Dec. 173, 848 N.E.2d 173, the mother argued that the father’s testimony that his expenses were reasonable and necessary was insufficient in the absence of any receipts substantiating such expenses. The court rejected the argument pointing out that the father’s tax returns showed itemized totals of expenses… The court concluded that such evidence constituted a prima facie showing that such expenses were legitimate, which the mother failed to rebut. And as in In re the Marriage of Baumgartner, 890 N.E. 2d 1256 (1st Dist 2008) husband’s non-reimbursed business expenses, as stipulated to by wife, constituted a prima facie showing that the expenses were legitimate. While the wife did not stipulate to the reasonableness of the business expenses, her argument, based solely on the lack of profit, does not rebut the reasonableness of the expenses.

Prior to July 1, 2017, Illinois section 505(a)(3)(h) of the Act permitted, in relevant part, deductions for “expenditures for repayment of debts that represent reasonable and necessary expenses for the production of income.” 750 ILCS 5/505(a)(3)(h) (West 2016). Thus, for an individual to successfully claim a deduction, he or she had to establish that it was a reasonable and necessary expense for the production of income and that “ ‘it [fell] into the category of debt repayment as evidenced by a specific repayment schedule.’ ” In re Marriage of Vance, 2016 IL App (3d) 150717, ¶ 42 (quoting In re Marriage of Nelson, 297 Ill. App. 3d 651, 655 (1998)); ¶23 as quoted from the most recent third district case Hochstatter and Hochstatter 2020 Ill App (3d) 109132.

Illinois Section 505 — Defining Business Income

Although the Hochstatter case dealt with depreciation, the court provided guidance as to the July 1, 2017 modification to section 505 relating to calculating net income from business income. Joshua’s testimony was unrefuted and there was no evidence presented to show that the business expenses he pays for his rental properties and his small business were or are inappropriate or excessive and therefore should not be excluded from the total of ordinary and necessary business expenses to be deducted in the determination of net business income from gross business income.


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