Because of California’s strong policy of placing a child’s needs first, California Family Code section 4053 defines income broadly, including income from any source derived. This means that regular gifts, dividends, rental income, etc can be included. Not only is a parent’s actual gross income considered, but the earning capacity of each parent may be considered as well. This means that the court can impute income against you, which means as far as the formula for child support is concerned they put an income higher than you claim to make into the formula as your income, because the court believes that you could make more money, but that you are choosing not to do so. They do this where they feel that it is in the best interest of the child(ren) in the case.
When looking at earning capacity, the court does not require that you are acting in bad faith, instead it is based on evidence that one party has the ability and opportunity to earn the higher amount based on evidence. In considering a parent's ability to make more money, the court looks at '"such factors as age, occupation, skills, education, health, background, work experience and qualifications." Marriage of LaBass & Munsee, (1997) 56 Cal. App. 4th 1331, 1337-1338. To show ability, litigants have presented evidence such as degrees/credentials obtained, prior job history, and resumes of the party.
If the court believes that the party has the ability to make more money, they then look to see if there is truly an opportunity for employment available. You may have an advanced degree, but if there are no jobs in the area that you live requiring those skills, you wont necessarily be able to work in that field. The court looks to see if there is a "substantial likelihood that a party could, with reasonable effort, apply his or her education, skills and training to produce income.” Marriage of Cohn (1998) 65 Cal. App. 4th 923, 930. They can look at want ads, opinion testimony, a vocational evaluation, etc in reaching a conclusion regarding whether there is truly ability and opportunity.
In most cases with attorney's involved, the court also hears evidence about how much money should be imputed against the parent who is underemployed. This can be evidence of pay skills in their industry, starting salaries in their industry, how much they made previously, etc.