How Is Income from a Trust or LLC Imputed for Child Support When the Parent Claims “Zero Salary”?

Child support calculations are meant to reflect a parent’s real ability to contribute to a child’s needs. In Texas, those calculations usually rely on the reported income from each parent's pay stubs, tax returns, and other financial records. However, issues can arise if a parent reports "zero salary" even when they receive income from business profits (e.g., a limited liability company), distributions, or trust payments.

At Garcia & Ramires, PLLC, we assist families who are dealing with child support concerns involving trusts, LLC income, and other family law issues. We know how stressful it can be when one parent claims zero salary while still benefiting from significant financial resources. 

Our role is to help you understand how Texas courts view imputed income when one parent receives money from an LLC or a trust and to advocate for child support outcomes that reflect your child’s real needs and both parents’ true financial picture.

How Imputed Income Is Handled in Texas Family Law

Imputed income refers to income that a court assigns to a parent even when that parent reports little or no earnings. Texas law allows judges to look at a parent's earning capacity, financial resources, and lifestyle when setting child support. The purpose is to prevent a parent from avoiding responsibility by hiding behind business structures or by choosing not to draw a salary.

When a parent claims zero salary from a trust or LLC, the court doesn’t automatically accept that figure. Judges will review that parent's bank records, profit distributions, business expenses, and personal spending patterns. If the evidence shows that the parent has access to money or receives financial benefits, the court may treat those funds as income for child support purposes.

Imputed income protects the integrity of the child support system. Without this legal option, a parent could reduce their support obligations simply by reclassifying their earnings.

How Courts View Income from Trusts

Trusts can provide regular payments, discretionary distributions, or indirect financial benefits. A parent may argue that trust funds don’t count as income because the payments are optional or controlled by a trustee. However, Texas law permits courts to closely examine trusts.

If a trust regularly pays for a parent’s living expenses, those payments can affect child support. For example, if a trust covers rent, mortgage payments, car expenses, or other personal costs, the parent gains financial value even without receiving a formal paycheck. The courts often treat those benefits as part of the parents’ resources.

Judges also look at the history of distributions. If a trust made consistent payments over several years, claiming that future income will be zero may lack credibility. The court can use these past patterns to estimate a parent's likely future income. Judges have broad discretion to review trust documents, speak with trustees, and evaluate whether the parent truly has access to funds.

LLC Ownership and Hidden Earnings

Income from a limited liability company often presents similar challenges. Sometimes, business owners may retain profits within the company rather than pay themselves a salary. Other business owners may label personal expenses as business expenses or take distributions that do not appear as wages on their tax forms.

Texas law allows the courts to dig deeper into a parent’s claimed salary. Judges may review a company's financial statements, tax returns, and bank records to determine whether the business is truly earning money. If an LLC pays for a parent’s vehicle, travel, meals, or housing, those benefits may count as income even if they appear on paper as business expenses.

The courts will also consider whether the parent controls the flow of money. When a parent owns and manages an LLC, the decision to pay a zero salary doesn’t automatically prove an inability to pay child support. Judges can examine the business's gross revenue, net profits, and spending habits to calculate a fair level of income.

If the business consistently generates profits, the court may assign a reasonable income figure based on those profits. The goal is to prevent manipulation of financial records that could reduce support obligations at the expense of the child.

Evidence That Can Affect Income Imputation

Child support cases involving trusts and LLCs depend heavily on financial evidence. Parents who ask a court to impute income often rely on detailed records to demonstrate each parent's actual income. If you are facing a case where the other parent claims "zero salary", some important types of proof you may need to provide include:

• The parent's personal and business bank statements
  

• The tax returns for the parent and the LLC
  

• Any profit and loss statements
  

• Trust documents and distribution histories
  

• Any records of personal expenses paid by a trust or business
  

• Credit card statements and lifestyle spending
  

• Testimony from accountants, trustees, or business partners

These materials help the court form a realistic view of the parents’ resources. Texas law encourages transparency, and judges may draw negative conclusions when a parent refuses to provide clear financial information. If you are facing issues with child support, reach out to our experienced family law attorneys today.

How Texas Courts Calculate Fair Child Support Amounts

Once a court decides to impute a parent's income, the next step is determining how much income to assign. Texas law provides guidelines based on a percentage of the parents’ net monthly resources. Judges typically start with those guidelines, but will also consider the unique details of each case.

In trust situations, the court may average several years of distributions to estimate the parent's future income. In LLC cases, the judge may review historical profits of the business and project what a reasonable salary would be for someone in the same role. The courts will also consider the parents’ education, work history, and overall earning capacity.

These factors are considered to protect the child's best interests. Child support isn’t meant to punish a parent, but it’s meant to provide stability and meet the child’s needs. When a parent enjoys a comfortable lifestyle while claiming no income, the courts will thoroughly investigate each parent's situation to provide the best resources for the child.

Taking the Next Steps in a Child Support Dispute

Disputes over imputed income can be stressful. However, they play an important role in creating fair child support outcomes and protecting a child’s well-being. At Garcia & Ramires, PLLC, we work with families facing challenges when one parent reports no salary due to trust income or business earnings.

These situations require careful attention and a clear strategy, especially when a parent’s true financial picture isn’t obvious. Our goal is to help you understand your options and take confident steps forward. With offices in Arlington, Fort Worth, and Dallas, Texas, we serve clients throughout the surrounding areas. Contact us today to schedule a consultation.