§4058(b) imputation: when a California court treats a parent as earning what they could earn

The §4058 income definition we walked through in our earlier post on §4058 self-employment math does most of the work in a child-support case: gross income in, deductions out, net disposable income lands in the §4055 formula. But §4058 has a second half that controls a much more contested set of cases — the ones where the question isn’t what a parent earns, but what they could earn if they wanted to.

That is §4058(b), the earning-capacity imputation statute. It is the legal authority a court uses to look past a parent’s tax return and order support based on a higher (or different) figure. It is also the most-litigated income statute in California family law — because it implicates both money and motivation, and the bench has had to draw careful lines about when imputation is appropriate and what evidence a court needs to do it.

This post is the §4058(b) walk-through. The statutory text (re-shaped by SB 343 in ways most explainers haven’t caught up to yet); the three-prong Cohn test and its predecessors; the Hinman “no bad faith required” rule; the McHugh exception for voluntary divestiture; and what an imputation argument looks like in dollars run through the post-SB-343 §4055 formula.

§4058(b), restructured by SB 343

Before SB 343, §4058(b) was a single sentence: the court may consider earning capacity in lieu of income, consistent with the children’s best interest. One verb. One discretionary trigger. The case law did most of the work.

SB 343 (Stats. 2023, Ch. 213, Sec. 3, operative September 1, 2024) restructured the subsection into three parts that work very differently:

(b) (1) (A) In a case when a parent’s annual gross income is unknown, the court shall consider the earning capacity of the parent.

(B) In a case when a parent’s annual gross income is known, the court may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s income, consistent with the best interests of the children, taking into consideration the overall welfare and developmental needs of the children, and the time that parent spends with the children.

(2) When determining the earning capacity of the parent pursuant to this subdivision, the court shall consider the specific circumstances of the parent, to the extent known. Those circumstances include, but are not limited to, evidence of the parent’s assets, residence, employment and earnings history, job skills, educational attainment, literacy, age, health, criminal record and other employment barriers, and record of seeking work, as well as the local job market, the availability of employers willing to hire the parent, prevailing earnings levels in the local community, and other relevant background factors affecting the parent’s ability to earn.

(3) Notwithstanding any other law, the incarceration or involuntary institutionalization of a parent shall not be treated as voluntary unemployment in establishing or modifying support orders regardless of the nature of the offense.

That is verbatim from the current statute at leginfo.legislature.ca.gov. The structural changes matter:

• (b)(1)(A) is now mandatory. When a parent’s income is unknown — the parent refuses to disclose, the records aren’t producible, the parent’s situation is genuinely opaque — the court shall consider earning capacity. There is no longer judicial discretion to default to zero in that fact pattern.
• (b)(1)(B) is discretionary. When the parent’s income is known and disputed (the classic voluntary-underemployment fact pattern), the court may impute — but only consistent with the children’s best interest, and considering the parent’s actual time with the children.
• (b)(2) is the evidentiary checklist. It enumerates what the court must consider when setting an earning-capacity figure. The list is intentionally non-exhaustive (“include, but are not limited to”) and reads like a roadmap for the practitioner’s exhibit binder.
• (b)(3) is the incarceration carve-out. SB 343 codified what some courts were already doing: an incarcerated parent’s drop in income is not “voluntary” and cannot be the basis for imputation.

Most existing online walk-throughs of §4058(b) still describe the pre-SB-343 single-sentence rule. The substantive analytic framework survived; the statutory shell did not. If your source on §4058(b) doesn’t acknowledge (b)(1)(A) / (B) / (2) / (3) as the operative structure, it is describing a law that no longer exists.

The Cohn three-prong test (originated in LaBass & Munsee)

§4058(b) tells the court that earning capacity is a permissible substitute for actual income. It does not tell the court what “earning capacity” means. That definition is judicial — and the canonical articulation comes from a 1997 case that the 1998 Cohn decision adopted and elaborated.

The three prongs (verbatim from In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, repeated in In re Marriage of Cohn (1998) 65 Cal.App.4th 923):

Earning capacity is composed of (1) the ability to work, including such factors as age, occupation, skills, education, health, background, work experience and qualifications; (2) the willingness to work exemplified through good faith efforts, due diligence and meaningful attempts to secure employment; and (3) an opportunity to work which means an employer who is willing to hire.

Three prongs: ability, willingness, opportunity. All three have to be present for the court to impute. The children’s best interest under §4058(b)(1)(B) is the separate statutory threshold that gates the inquiry — it is not one of the prongs.

Cohn contributed the strong “opportunity” gloss that practitioners now lean on:

The “opportunity to work” exists when there is substantial evidence of a reasonable likelihood that a party could, with reasonable effort, apply his or her education, skills and training to produce income.

And the corollary: a court abuses its discretion by imputing income to a parent who has ability but no real-world opportunity — for example, a parent who is genuinely seeking work in a market where their skill set is no longer in demand. Imputation requires more than “they used to make $X” or “they could make $X in some other market”; it requires substantial evidence that this parent in this market could land this kind of job.

Hinman: no “bad faith” required

The other foundational case is In re Marriage of Hinman (1997) 55 Cal.App.4th 988, decided just weeks before LaBass & Munsee. Hinman rejected a “bad faith” prerequisite for imputation:

The bad faith rule, as applied to child support, if not ill conceived in the first instance, can no longer be supported.

That is the load-bearing rule for §4058(b) practice today. The moving party does not have to prove that the underemployed parent is trying to dodge support. The court can find that the parent could be earning more, that the children would benefit if the parent did, and that imputation is justified — even if the parent’s underemployment is, in some subjective sense, sincere.

That makes imputation a much more accessible motion than it sounds. It is not “prove the other parent is gaming the system.” It is “show that this parent could earn more and that imputing the higher figure serves the children.”

The McHugh bypass

There is one important narrowing of the three-prong gate. In re Marriage of McHugh (2014) 231 Cal.App.4th 1238 held that the Cohn prongs do not all have to be separately proven when the court finds that the parent’s drop in income was the result of a voluntary and deliberate effort to reduce their support obligation. The Judicial Council’s own 2024 imputed-income training materials describe this as a live rule that survives SB 343 unchanged:

Ability & Opportunity NEED NOT BE SHOWN if departure reflects “voluntary and deliberate” effort to reduce income for support.

So the practical framework after Cohn / Hinman / McHugh and SB 343 is layered:

1. Income known + voluntary-and-deliberate divestiture finding → imputation available without separately proving each Cohn prong (McHugh).
2. Income known + no voluntary-deliberate finding → standard Cohn three-prong analysis under §4058(b)(1)(B); discretionary; tied to children’s best interest.
3. Income unknown → court shall consider earning capacity (§4058(b)(1)(A)); the §4058(b)(2) evidentiary checklist drives the figure.
4. Income drop due to incarceration → not voluntary as a matter of statute; cannot ground imputation (§4058(b)(3)).

What an imputation argument moves in dollars

Imputation isn’t a separate calculator — it is a substitution of one figure for another in the §4055 input set, after which the formula runs as usual. The post-SB-343 §4055 K-table we walked through in the SB 343 K-factor post doesn’t care whether the income came from a tax return or from an imputed earning-capacity finding. Same K-bands, same multipliers.

A worked example. Parent A is the higher-earning parent (claimed monthly net $3,500), 20% custody timeshare. Parent B (NDI $1,500/mo, 80% custody, primary) brings an imputation motion under §4058(b)(1)(B) arguing that Parent A — a credentialed registered nurse — is voluntarily underemployed at half-time hours when the local market has unfilled full-time openings at $7,000/mo net. The Cohn three-prong evidence:

• Ability — RN license current; resume shows prior full-time hospital work at $6,800–$7,400/mo net.
• Willingness — disputed; Parent B introduces three job postings Parent A could have applied to and didn’t.
• Opportunity — local hospital posts five full-time RN openings in the relevant pay band as of the motion date.

If the court accepts the imputation and substitutes $7,000/mo as Parent A’s NDI, the §4055 math at TN = $8,500 (the new imputed total) runs in the $5,001–$10,000 band at an income fraction of 0.25, timeshare multiplier 1.20 for H% = 0.20, K = 0.30. The bracketed [HN − H%·TN] term becomes $7,000 − 0.20 × $8,500 = $5,300. Guideline support: 0.30 × $5,300 = $1,590/month.

If the court instead accepts Parent A’s actual $3,500 NDI, TN drops to $5,000, the same K-band applies, K = 0.30, and the bracketed term becomes $3,500 − 0.20 × $5,000 = $2,500. Guideline support: 0.30 × $2,500 = $750/month.

The imputation question, in this fact pattern, is $1,590 vs. $750 — an $840/month difference. Which is why §4058(b) motions matter so much in cases where one parent’s income disclosure is contested. The same algebraic formula produces support orders that are more than 2x apart depending on which income figure the court adopts.

Our calculator lets you model both sides explicitly. The §4058 income panel accepts either the parent’s actual reported income or an “imputed” override — you can compare both guideline outcomes side-by-side, see exactly which K-band each lands in, and see what the bracketed term works out to. That visibility is the whole point: an imputation argument is much harder to make (or rebut) when you can’t show the trial court what the formula does at both inputs.

What this post is not

This is an explainer of the post-SB-343 §4058(b) framework, the Cohn three-prong test, Hinman’s rejection of bad-faith requirements, McHugh’s voluntary-and-deliberate bypass, and what an imputation argument moves in §4055 dollars. It is not legal advice. §4058(b) motions are some of the most fact-specific motions in California family law — the Cohn prongs require specific evidence (W-2s, license verifications, market data, job-search records) and the §4058(b)(2) evidentiary checklist reads like a litigation playbook. If imputation is on the table in your case, a licensed California family-law attorney’s input on which prongs to brief, what evidence to gather, and how to frame the motion is genuinely load-bearing.

Two related pieces worth reading alongside this one: our walk-through of the §4055 K-table changes under SB 343 (because imputation arguments live or die in the K-band the new TN lands in), and our piece on §4057 deviation (because §4058(b) imputation arguments and §4057(b) deviation arguments are often pleaded as alternatives — and they have very different procedural requirements).

The statute and case-law text quoted above were current as of the statute_as_of date in this post’s frontmatter; we re-verify all citations quarterly. The page footer’s disclaimer applies to every section above.