15 AAC 125.030. Total income from all sources

(a) For purposes of 15 AAC 125.020, total income from all sources is the expected actual annual income that the parent will earn or receive when the child support award is to be paid. The expected actual annual income consists of

(1) salaries and wages, including overtime and tips;

(2) commissions;

(3) severance pay paid over an extended period of time;

(4) royalties;

(5) bonuses and profit sharing;

(6) interest and dividends, including permanent fund dividends;

(7) income derived from self-employment and from business partnerships;

(8) social security benefits;

(9) veterans benefits;

(10) insurance benefits in place of earned income, such as workers' compensation or periodic disability payments;

(11) workers' compensation;

(12) unemployment compensation;

(13) pensions;

(14) annuities;

(15) income from trusts;

(16) capital gains in real and personal property transactions to the extent that they represent a regular source of income;

(17) spousal support received from a person not a party to the order;

(18) income from contractual agreements;

(19) prerequisites or in-kind compensation, such as employer provided housing and transportation benefits, to the extent that they are significant and reduce living expenses;

(20) income from life insurance or endowment contracts;

(21) income from interest in an estate, whether received directly or through a trust;

(22) lottery or gambling winnings received as an annuity;

(23) prizes and awards;

(24) net rental income;

(25) G.I. benefits, excluding education allotments;

(26) National Guard and Reserves drill pay; and

(27) Armed Service Members base pay plus the parent's allowances for quarters, rations, cost of living allowance, and specialty pay.

(b) Except as provided in (e) of this section, the expected actual annual income that a parent will earn or receive does not include

(1) a lump sum withdrawal from a pension or profit sharing plan, to the extent the proceeds have already been treated as a portion of total income for the purpose of calculating a child support award under Alaska Rule of Civil Procedure 90.3;

(2) means-based sources of income such as Alaska Temporary Assistance Program (ATAP), Food Stamps, and Supplemental Security Income; however, Children's Insurance Benefits paid to the parent's dependents is considered income; or

(3) one time gifts and inheritances, but interest from the principal amount is considered income and the agency will, in its discretion, consider the amount of the principal as income in determining whether unusual circumstances exist as provided in 15 AAC 125.075.

(4) tax deferred dividends and interest

(A) earned on pension or retirement accounts, including individual retirement accounts under 26 U.S.C. 408 - 408A (Internal Revenue Code; and

(B) not distributed to the parent; or

(5) child support payments received from another individual.

(c) For the purposes of determining the total income of a parent, income from self-employment, rent, royalties, or an ownership interest in a partnership or closely held corporation includes the gross receipts minus the ordinary and necessary expenses required to produce the income. Ordinary and necessary expenses do not include any accelerated component of depreciation, investment tax credit, or any other business expense determined by the agency to be inappropriate. The agency will include an expense reimbursement and an in-kind payment, such as use of a company car, free housing, or reimbursed meals, as income if the amount is significant and reduces living expenses. The agency will offset expenses against the gross receipts from the business in which the expenses were generated, but the agency may not offset the expenses incurred in one business against income from another source such as wages or rents.

(d) If the parent has experienced a wide variation in total income from year to year, the agency will, in its discretion, average income over more than one year to determine the parent's expected actual annual income. Except in unusual circumstances, the agency will not average more than the last three years of income.

(e) For purposes of 15 AAC 125.020, when the agency is calculating arrears under 15 AAC 125.105, total income from all sources is the actual annual income that the parent earned or received in each calendar year for which arrears are sought to be established in each category listed under (a) of this section. When the agency calculates arrears under 15 AAC 125.105, total income from all sources

(1) includes one time or lump sum payments, including one time gifts and inheritances that would otherwise be excluded from income under (b)(3) of this section; and

(2) does not include payments that are excluded from income under (b)(1), (b)(2), (b)(4), or (b)(5) of this section.

History: Eff. 8/23/80, Register 75; am 10/1/85, Register 95; am 10/1/98, Register 147; am 6/15/2001, Register 158

Authority: AS 25.27.020

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