As stated above, the Incomes Shares model determines the basic child support obligation by using the gross incomes of both parties. “Child support obligations should be determined by a party's gross income at the time the order is made.” Hodges v. Hodges, ___, N.C.App. ____, 556 S.E.2d 7, 10 (2001)(emphasis added).  The Guidelines define income as, “actual gross income of the parent, if employed to full capacity, or potential income if unemployed, or underemployed.” Barham v. Barham, 127 N.C.App 20, 24, 487 S.E.2d 774, 777 (1997).  Gross income is defined by the Guidelines as, “income from any source, except as excluded below, and includes but is not limited to income from salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers' compensation benefits, unemployment insurance benefits, disability pay and insurance benefits, gifts, prizes and alimony or maintenance received from persons other than the parties to the instant action.” N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 2 (1998).  However, “while includable as income, non-recurring, one-time payments should be distinguished from ongoing income.” Id.

“Gross income from self-employment or operation of a business is defined as “gross receipts minus ordinary and necessary expenses required for self-employment or business operation.” Burnett v. Wheeler, 128 N.C.App 174, 176, 493 S.E.2d 804, 805 (1997)(relying on N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 3 (1998). “Specifically excluded from ordinary and necessary expenses for purposes of these Guidelines are amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits or any other business expenses determined by the Court to be inappropriate for determining gross income for purposes of calculating child support.” Id. “In general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation.  In most cases, this amount will differ from a determination of business income for tax purposes.” Id. The Guidelines go on to state that , “Expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment or operation of a business should be counted as income if they are significant and reduce personal living expenses. Such payments might include a company car, free housing or reimbursed meals.” N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 3 (1998).

In determining a party's income for child support purposes, one must not only consider the party's gross income, but his or her potential income as well. Potential income is defined as a party's capacity to earn income.  Ellis v. Ellis, 126 N.C.App. 362, ____, 485 S.E.2d 82, 83 (1997). “A party's capacity to earn income may become the basis of an award if it is found that the party deliberately depressed his income or otherwise acted in deliberate disregard of the obligation to provide reasonable support for his child.” Id.  “Factors to be considered when calculating potential income are: obligor's recent work history, occupational qualifications and prevailing job opportunities and earning levels in the community.” McDonald v. Taylor at 25, 415 S.E.2d at 85.  However, “where there is no recent work history, higher education, or vocational training, the Guidelines suggest that income may be imputed at least at the minimum hourly wage for a 40-hour week.” Id.

Simply because a party is not employed at his or her earning capacity does not mean that potential income, rather than gross income, should be used to determine his or her income. “Before the earnings capacity rule is imposed, it must be shown that the party's actions which reduced his income were not taken in good faith.” Ellis v. Ellis at ____, 485 S.E.2d at 83.  Moreover, “even if the court determines that a parent is voluntarily unemployed or underemployed, the court is vested with discretion regarding whether or not to impute income.” Schroader v. Schroader, 120 N.C.App. 790, 792, 463 S.E.2d 790, 793 (1995)(emphasis added).  For modification of child support purposes, “a voluntary decrease in income, absent a finding of bad faith, may be considered to support a finding of changed circumstances.” Id.  “However, if the decrease is voluntary, the movant has the additional burden of showing that the changed circumstances related to child-oriented expenses.” Id.  The North Carolina Court of Appeals established in Pittman v. Pittman that an involuntary decrease in income is sufficient alone to constitute changed circumstances for the purposes of modification of child support, even in the absence of any evidence showing a change in the child's needs. Id. (relying on Pittman v. Pittman, 114 N.C.App. 808, 443 S.E.2d 96 (1994)). “Thus, where the trial court finds that the decrease in a party's income is substantial and involuntary, without a showing of deliberate depression of income or other bad faith, the trial court is without power to impute income, and must determine the party's child support obligation based on the party's actual income. Ellis v. Ellis at ___, 485 S.E.2d at 83.

Should the court find that the gross income of a party does not afford the party to maintain a minimum standard of living based on the 1997 federal poverty level for one person, a self support reserve is employed in determining the amount of child support. N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 2 (1998). “For obligors with an adjusted gross income of less than $800, the Guidelines require, absent an deviation, the establishment of a minimum support order ($50).” Id. “For obligors with adjusted gross incomes above $800,” but which fall in the shaded area of the Schedule of Basic Support Obligations, “the basic child support obligation and the obligor's total child support obligation are computed using only the obligor's income.” Id.

“Income statements of the parents should be verified with documentation of both current and past income.” N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 4 (1998).  “Suitable documentation of current earnings (at least one full month) includes pay stubs, employer statements, or receipt and expenses if self-employed.” Id. “Documentation of current income must be supplemented with copies of the most recent tax return to provide verification of earnings over a longer period.” Id. “Sanctions may be imposed for failure to comply with this provision on the motion of either party or by the Court on its own motion.” Id.

Finally, the following issues must also be considered in determining one's gross income:

1. Pre-existing child support order/agreement. “Child support payments made pursuant to “any pre-existing court order(s) or separation agreement(s) should be deducted from the party's gross income.” Hodges v. Hodges at ____, 556 S.E.2d at 11. 
    
2. Health insurance.
   1. “Health insurance should be provided by the parent who, through his employer, has the most comprehensive coverage at the least cost. The cost of that insurance coverage should be deducted from that parent's gross income.” Schroader v. Schroader at 797, 463 S.E.2d at 794. The amount included in the child support calculation is the amount of health insurance premium actually attributable to the child(ren) subject to the order. N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 5 (1998).
   2. “Medical or dental expenses in excess of $100 per year and uncompensated by insurance should be divided between the parties in proportion to their respective incomes.” N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 4 (1998).
3. Responsibility for other children.
   1. “The amount of a party's financial responsibility for his or her natural or adopted child(ren) currently residing in the household who are not involved in this action should be deducted from gross income. Use of this deduction is appropriate at the time of the establishment of a child support order.” Osborne v. Osborne, 129 N.C.App. 34, 41, 497 S.E.2d 113, 117 (1998).
   2. “The deduction for a party's financial responsibility for other child(ren) is one-half of the basic child support obligation for the number of child(ren) who live with the party and for whom the party owes a duty of support (other than the child(ren) involved in the instant action.  For purposes of this deduction, the basic child support obligation for the other child(ren) living with the party is based on the combined adjusted gross incomes of the party and the other responsible parent of such children.” Id.
4. Child care costs. “Reasonable child care costs incurred due to employment or job search are added to the basic obligation at follows:
   1. When the gross monthly income of the party paying such costs falls below the level indicated below, 100% of the child care costs are added:
      1 child=       $1,100
      2 children = $1,500
      3 children = $1,700
      4 children = $1,900
      5 children = $2,100
      6 children = $2,300
   2. When the income of the party exceeds the level indicated above, 75% of child care costs are included since the party would be entitled to the income tax credit for child care expenses.”
      N.C. Admin. Office of the Courts, N.C. Child Support Guidelines, AOC-A-162 at 4 (1998).
5. Extraordinary expenses.
   1. “The court may make adjustments for extraordinary expenses and order payments for such term and in such manner as the Court deems necessary.” Mackins v. Mackins, 114 N.C.App. 538, 548, 442 S.E.2d 352, 358 (1994). “Extraordinary medical expenses included, but are not limited to, such costs as are reasonably necessary for orthodonture, dental treatments, asthma treatments, physical therapy and any uninsured chronic health problem.” Id. at 549, 442 S.E.2d at 358.  “At the discretion of the Court, professional counseling or psychiatric therapy for diagnosed mental disorders may also be considered as an extraordinary medical expense.” Id. “Payments for such expenses shall be apportioned in the same manner as the basic child support obligation and ordered paid as the Court deems equitable.” Id.
   2. “Other extraordinary expenses are added to the basic child support obligation.  Other extraordinary expenses include:

1. Any expenses for attending any special or private elementary or secondary schools to meet the particular emotional needs of the child(ren);
2. Any expenses for which for transportation of the child(ren) between the homes of the parents.  Id.