Income For Child Support Purposes

Are you involved in a divorce or child custody case involving child support? (The Colorado statutory tiles for these are dissolution of marriage and allocation of parental responsibilities). An experienced Colorado Springs divorce and child custody lawyer can guide you through the legal process and assist you in exploring your options. You have one bite at the apple in the court system so make it count.

It is important to have an understanding of how child support is calculated. Child support is calculated using each party’s gross income and the number of overnights of the child with each parent. Colorado defines income broadly for purposes of support. Gross income, for child support purposes, is defined as income from any source. Income is generally limited to the amount earned for a full-time position and does not include additional employment exceeding full-time work.

Monetary gifts can also be considered income if they are consistent. Also, interest income is included. Public assistance benefits, such as food stamps and low-income social security benefits, are not counted as income for support purposes. There is a separate child support calculation for low-income parents resulting in a minimal obligation. Overtime wages are only counted if the overtime is required by the employer. Discretionary overtime does not count towards income for child support purposes.

While W-2 income is easy to determine, income from self-employment is more difficult as income is calculated by subtracting legitimate business expenses from funds received. C.R.S. § 14-10-115 defines self-employment income as gross receipts minus ordinary and necessary expenses required to produce the income. Business income is often documented in a Schedule C on an income tax return and identifies operating expense deductions specifically. Business bank records are helpful as well, as they show more detail about income sources and expenses. For example, they may be helpful in determining improper deductions. Judges have some discretion in determining income. For example, accelerated depreciation, while a valid business expense, is not usually considered to be an ordinary and necessary expense for support purposes, thus it would be added back into income.

Employment-related expense reimbursements may be added back to income for support purposes “if they are significant and reduce personal living expenses.” For example, the value of the personal use of a company vehicle may be added back to income because it would offset the necessity of purchasing a personal vehicle. In addition, employers will usually include such value as income on a W-2 statement as taxable income. Housing and food allowances for military personnel are included for the same reason. Courts have discretion in determining whether to count such in-kind expense coverage or reimbursements.

A highly knowledgeable and experienced Colorado Springs divorce and child custody lawyer can guide you through Colorado Springs divorce and child custody matters by negotiating, mediating and litigating on your behalf. You can focus on moving to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has more than 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find at https://store.lexisnexis.com/products/colorado-family-law-with-forms-skuSKU02903. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation. We also offer paid one-hour advice sessions for a more in-depth analysis of your case.