The Illinois Appellate Court recently ruled on a significant case regarding child support and income calculations in the divorce of Michelle Steele and Chad Schroeder. The court's decision, filed on September 17, 2026, addresses whether withdrawals from an individual retirement account (IRA) should be counted as income for support purposes. This ruling impacts how future child support calculations may be handled in Illinois, affecting many families navigating similar situations.
This case, docket number 2-24-0507, stems from a divorce judgment between Steele and Schroeder, finalized on May 26, 2017. The couple has a son, B.S., born in 2012. The original marital settlement agreement (MSA) required Chad to pay Michelle a monthly child support of $2,200, maintenance of $2,800, and a percentage of any additional income earned beyond a specified amount. The dispute arose when Michelle filed a motion in February 2023, claiming Chad failed to report his income accurately, including withdrawals from his IRA.
In her motion, Michelle sought to enforce the judgment, arguing that Chad's IRA withdrawals should be counted as income for child support calculations. Chad contested this, asserting that the withdrawals did not constitute income and that he was not willfully failing to pay support. After several hearings, the trial court found Chad in indirect civil contempt for not providing necessary financial documentation and ruled that the IRA withdrawals should be included in his income for support purposes.
On appeal, the Illinois Appellate Court examined the definition of income under the Illinois Marriage and Dissolution of Marriage Act (Act). The court, led by Justice McLaren, stated, "The money that an individual earns and places in an IRA already belongs to him. When he withdraws money that he placed into an IRA, he does not gain anything, as the money was already his; it is not a gain and not income." This ruling clarifies that IRA withdrawals are not automatically considered income for child support calculations, as they are merely the return of the individual’s own funds.
The court decided to reverse the trial court's order that included Chad's IRA withdrawals as income. The ruling emphasized that only the interest or appreciation earnings from the IRA could be considered income for support purposes. The court stated, "To count all of Chad’s withdrawals as income for support purposes would constitute an impermissible double counting, as the money deposited in the IRAs had been previously imputed to him as income." This aspect of the ruling is significant as it sets a precedent for how IRA withdrawals are treated in future child support cases.
Additionally, the court upheld the trial court's finding that Chad was in indirect civil contempt for failing to provide required financial documentation but vacated the ruling regarding the unenforceability of the support cap in the MSA. The court noted that the trial court had no authority to modify the MSA without a formal request to do so. As a result, the portion of the trial court’s order that deemed the support cap unenforceable was vacated.
The implications of this ruling are far-reaching. Families dealing with divorce and child support issues in Illinois can expect that IRA withdrawals will not be automatically counted as income, which could affect how support obligations are calculated. This decision may prompt individuals to reassess their financial planning and disclosures during divorce proceedings.
Moving forward, the case has been sent back to the lower court for further proceedings regarding the specific composition of Chad's IRA withdrawals, particularly distinguishing between principal and interest. The ruling also leaves open the possibility for appeals or related motions regarding the enforcement of the MSA.
Overall, the Illinois Appellate Court's ruling in the case of In re Marriage of Steele clarifies the treatment of IRA withdrawals in child support calculations, providing guidance for future cases and ensuring that individuals are not penalized for withdrawing their own funds.