Defining Income for Child Support Purposes

Illinois has been at the forefront in these “income” cases. 750 ILCS 5/505 provides for a presumption that various percentages of a payor's “net income” shall be used. Unfortunately, Section 505 does not define “gross income,” requiring definitions to be established through caselaw. Some other states are more specific in their statutory definitions.

Various Illinois rulings have inconsistent holdings. In In re Marriage of Tegeler, 848 N.E.2d 173 (Ill.App. Ct. 2006) Section 505 was interpreted and the court concluded that a line of credit offered to the father for his farm operations did not constitute income. The appellate court looked at the Illinois Supreme Court's 2004 decision in In re Marriage of Rogers (820 N.E.2d 386) and determined that a line of credit was not an increment, addition or a gain because it had to be repaid. The decision noted, “This court has stated that income represents a gain or profit that is generally understood to be a return on an investment of labor or capital, thereby increasing the recipient's wealth. In re Marriage of Worrall, 334 Ill.App.3d 550,553-54, 268 Ill. Dec. 411, 778 N.E.2d 397 (2002).” 848 N.E.2d at 179. In In re Marriage of Baumgartner, 890 N.E.2d 1256 (Ill.App.Ct. 2008) which also quoted Tegeler, the court held that mortgage loan proceeds were not income because they did not increase an individual's wealth as they had to be repaid. That court concluded, “Such loans do not meet the definition of 'income' as set forth in Rogers II as they do not share similar features with the examples set forth in the definition cited therein.” 890 N.E.2d at 1269.