Yearly bonus question

[southernmama]

Every year in January, I get an annual bonus from job but the amount can vary depending on how well we do for the year. So I can get $0-4k. My company did well in 2016 so I look to get around $3800. My question is do I have to turn over to the trustee? We've already had our 341 and our confirmation hearing is in March. It's part of my annual income and have to pay taxes on it and also last year paperwork I had to turn in to file shows everything as well. Not sure how this works if someone can please she'd some light on it. Thank you.

[justbroke]

If you received it after you filed for Chapter 13 and it's not accounted for in your disposable monthly income (DMI) it "may" be subj4ct to turnover to the custody and control of the Trustee. I say "may" because your attorney could have averaged it and counted in your "current monthly income" (CMI) on your Means Test and/or Schedule I. It "may" also be because, in your State/District, any money received prior to confirmation (such as tax refunds and other irregular income) could be outside the Trustee's grasp.

So, since you say that it's included in your W-2 earnings, and "if" the amount was similar last year, "and" included in your calculations then it is likely no necessary to turn over. However, the Means Test is typically done just doing the six-month lookback period and you may not have included that by looking at your six-month period (which was sometime in the latter part of 2016 so may not have included a January bonus).

It just depends. Your attorney can tell you if that annual bonus was already calculated in your CMI and/or if you need to surrender the amount. The reason I say the Plan may be controlling is because the Plan will usually state that you must surrender certain income to the Trustee. Since you are pre-confirmation you may be in a gray area.

[southernmama]

I didn't wonder about it until now because our job gives me quarterly bonuses of $1500-2000 (The trustee saw 2 of those paystubs) and those bonuses are taxes and included in my yearly earnings as well so I didn't know if it would be different.

[justbroke]

If it was included in that lookback and the calculations, then it should have already been calculated into your CMI.

[karna68]

It may also depend on your trustee. We have 2 trustees here. One is known for taking bonuses and tax refunds while the other lets you keep them.

[lvmilizia]

I get a yearly bonus in March every year, and it was not included in my income to calculate my monthly payment, so I have to pay the after tax amount to the trustee each March. It states this in the plan confirmation. Before I was my plan was confirmed by attorney told me I had to pay it in.

[southernmama]

Was it included in your 6 month looking back period?

[lvmilizia]

Yes, I filed in May and received a bonus that past March, but when they calculated payment they took it out, and said I had to turn it in every year. Which I guess works out since putting in my payment would of made the month to month payment higher, when I am not actually making that income each month.

[southernmama]

Does your trustee let you keep any of it? Our payment kind of stinks because we wanted to put some distance between my last year's bonus in January so we waited to file until September which was worse because my husband got paid 3 times in March and I got paid 3 times in April and I also get quarterly incentives and had received 2 in those 6 months so it ended up hurting us. I wish I knew then what I know now about how this works.

[justbroke]

I have annual bonuses as well. My bonus was calculated into my Plan payment (and Means Test). I was not required to turn it over since it was already being factored into the plan payment.

As always, some of these things are dependent on your district and/or your specific Trustee.

[lvmilizia]

NO they do not let me keep any of it, trust me I ask my attorney every year!! Before you worry about it to much you should ask your attorney how your plan is set up for these. Like justbroke said it all depends on district/trustee. My Trustee asked in a questionnaire at the start of the process if there was any kind of bonus received every year. I stated yes but it was not guaranteed that we get one, although we have never not gotten it, so that may be why it was not figured into our payment. If it was figured into my payment it would of made month to month living hard, we are fine with payment where it is at but if you add in a few hundred more dollars a month it would be very difficult. Although I do cry a little each year I send that check for the bonus into the trustee. This March will be bonus number 3 to the trustee, only 2 more to go.

[karna68]

It really irks me how they can include your bonus in your income. I mean it is income but it's a once a year thing, I too get a yearly bonus in March. Plus mine may not be the same amount every year, yet they take the last amount you received and average it over 6 months as part of your income, grrr...

[justbroke]

As for how it is averaged, you can always have your attorney draft your plan so that you just surrender the entire single annual bonus (if your bonus is annual).