The Basics You Should Know About Child Support Calculations in Colorado: Income (Part 1)
In Colorado, numerous factors go into calculating child support. The main factors include: (1) monthly income of both parties; (2) number of children; (3) annual overnights with each parent; (4) work and education related child care costs; (5) the children’s share of health insurance costs; and (5) extraordinary medical and other extraordinary expenses for the children. This article focuses primarily on calculating income, for purposes of calculating child support in Colorado (stay tuned for future articles on income calculations and about the other factors!).
Pursuant to C.R.S. 14-10-115, the parties’ gross income (before taxes, health insurance premiums, etc. are deducted), not net income, is used to calculate child support. But how do you determine your gross income? If you’re a salaried employee and your salary is your only source of income, then this calculation is likely pretty easy. Pull out your paystub and search for the “total gross” line.
If you receive income from other sources, this calculation may become more complex.
C.R.S. 14-10-115 states that “gross income includes income from any source” including the following:
(A) Income from salaries;
(B) Wages, including tips declared by the individual for purposes of reporting to the federal internal revenue service or tips imputed to bring the employee’s gross earnings to the minimum wage for the number of hours worked, whichever is greater;
(C) Commissions;
(D) Payments received as an independent contractor for labor or services, which payments must be considered income from self-employment;
(E) Bonuses;
(F) Dividends;
(G) Severance pay;
(H) Pensions and retirement benefits, including but not limited to those paid pursuant to articles 51, 54, 54.5, and 54.6 of title 24, C.R.S., and article 30 of title 31, C.R.S.;
(I) Royalties;
(J) Rents;
(K) Interest;
(L) Trust income;
(M) Annuities;
(N) Capital gains;
(O) Any moneys drawn by a self-employed individual for personal use that are deducted as a business expense, which moneys must be considered income from self-employment;
(P) Social security benefits, including social security benefits actually received by a parent as a result of the disability of that parent or as the result of the death of the minor child’s stepparent but not including social security benefits received by a minor child or on behalf of a minor child as a result of the death or disability of a stepparent of the child;
(Q) Workers’ compensation benefits;
(R) Unemployment insurance benefits;
(S) Disability insurance benefits;
(T) Funds held in or payable from any health, accident, disability, or casualty insurance to the extent that such insurance replaces wages or provides income in lieu of wages;
(U) Monetary gifts;
(V) Monetary prizes, excluding lottery winnings not required by the rules of the Colorado lottery commission to be paid only at the lottery office;
(W) Income from general partnerships, limited partnerships, closely held corporations, or limited liability companies. However, if a parent is a passive investor, has a minority interest in the company, and does not have any managerial duties or input, then the income to be recognized may be limited to actual cash distributions received.
(X) Expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business if they are significant and reduce personal living expenses;
(Y) Alimony or maintenance received; and
(Z) Overtime pay, only if the overtime is required by the employer as a condition of employment.
Two of the factors outlined in the statute are discussed in more detail below:
Bonuses
Although the statute includes bonuses as income, the Colorado Court of Appeals found that when future bonuses are not guaranteed, the Court does not have to include bonus income to the gross income calculation. See In re Marriage of Finer, 920 P.2d 325 (Colo. App. 1996). In this particular case there was a “lack of certainty of future bonuses.” If you have received a bonus every year for the past few years, it’s very likely that the Court will include your bonus income in your gross income calculation.
Monetary Gifts
Yes, you read that correctly, monetary gifts may be included in your gross income calculation. Does this include the $250 your grandmother gave you for Christmas? Probably not. According to In re Marriage on Nimmo, a monetary gift must be “regularly received from a dependable source.” 891 P.2d 1002 (Colo. 1995). An example of a “regularly received monetary gift from a dependable source” may include a family member paying your credit card bill every month or depositing $1,000 into your account every month (or a few times each year).
If you intend to argue that the other party regularly receives monetary gifts for a dependable source, you will need to verify this fact. If the party receives cash transfers, then request their bank statements. If the party’s rent is paid on their behalf, request proof of payment or canceled checks. If the party’s credit card is paid by another individual, request the credit card statements and proof of payment.
C.R.S. 14-10-115 also states that gross income does not include:
(A) Child support payments received;
(B) Benefits received from means-tested public assistance programs, including but not limited to assistance provided under the Colorado works program, as described in part 7 of article 2 of title 26, C.R.S., supplemental security income, food stamps, and general assistance;
(C) Income from additional jobs that result in the employment of the obligor more than forty hours per week or more than what would otherwise be considered to be full-time employment;
(D) Social security benefits received by the minor children, or on behalf of the minor children, as a result of the death or disability of a stepparent are not to be included as income for the minor children for the determination of child support; and
(E) Earnings or gains on a retirement account, including an IRA, which earnings or gains must not be included as income unless or until a parent takes a distribution from the account. If a distribution from a retirement account may be taken without being subject to an IRS penalty for early distribution and the parent decides not to take the distribution, the court may consider the distribution that could have been taken in determining the parent’s gross income if the parent is not otherwise employed full-time and the retirement account was not received pursuant to the division of marital property.
One factors outlined in the statute are discussed in more detail below:
Income From Additional Jobs
If you read the statute carefully, it states that income includes “income from additional jobs that result in the employment of the obligor more than forty hours per week or more than what would otherwise be considered to be full-time employment.” The question that goes unanswered is, who is an “obligor” in this context?
If you are the party likely paying child support and work two jobs, then you may want to argue that “obligor” refers to you as the party responsible for paying child support (the obligor for child support), because you will only want income from one job (likely your primary/full-time job) included in the child support calculation. This is because, the higher your income, for purposes of calculating child support, the higher your child support obligation will likely be.
If you are the party likely paying child support and the receiving party currently works two jobs, then it will likely benefit you (your child support obligation will likely be less) if the other party’s income, for purposes of calculating child support, includes income from both jobs (because then their income will be higher). If this is the case, then you may want to argue that the statute requires income from additional jobs to be included in the other party’s income calculation, because they are the oblige and if the legislature meant to say that a second job for an OBLIGEE does not count as income, they could have said so.[1] Again, the statute currently only addresses additional job income for the OBLIGOR.
If you are the party likely to receive child support and if you work two jobs, then it will likely benefit you if your income, for purposes of calculating child support, only includes income from one job (your child support payment will likely be higher). If this is the case, then you may want to argue that both parties are “obligors.” Line 13 of the Child Support Worksheet identifies each party’s ‘financial support obligation,’ making them both ‘obligors.’ The resulting child support payment obligation by one parent is derived simply by subtracting what the ‘obligee’ is already obligated to pay.
However, the Colorado Court of Appeals held that “if the ‘second’ income is intertwined with the first, the second income must be considered.” In re the Marriage of Salby, 126 P.3d 291 (Colo. App. 2005). Thus, if the two incomes are intertwined, regardless if you are the obligor or obligee, both incomes will be included in the gross income calculation.
This is Part 1 of a multi-part series which will discuss the basics of calculating child support. Stay tuned for Part 2!
If you have questions about this topic, other issues concerning child support, or any other family law issue, please contact Gregg Greenstein.
Sylvia Brownfield is no longer with the law firm of Frascona, Joiner, Goodman and Greenstein, P.C.
[1] See, e.g., Hartman v. Freedman, 197 Colo. 275, 591 P.2d 1318 (Colo. 1979) (had the legislature intended to include vacation pay with the dissimilar benefits of pension plans and profit-sharing plans, it could have done so by express statutory language. Absent such language, we hold that “deferred compensation programs” do not encompass vacation pay); In re Marriage of Eisenhuth, 976 P.2d 896 (Colo. App. 1999) (“If the supreme court had intended C.R.C.P. 4(e) to include a requirement that the family member accepting service must reside in the house with the party being served, it could have drafted the rule to contain language similar to its federal counterpart.”); Eichhorn v. Kelley, 56 P.3d 124 (Colo. App. 2002) (interpreting Rule 107 – the inclusion of certain items implies the exclusion of others).