When issues of income are contested in a divorce or during post-decree matters, clients are usually disputing what is or should be income for purposes of financial support.
In these matters, there are often issues of one parent working less or earning less than they did during the marriage or an earlier period of time.
Sometimes we must negotiate imputed income, or what the parent is capable of earning.
There are also many cases where the lesser income is justified or explained so the parent’s income should not be imputed or made to be a greater amount for purposes of support.
GROSS INCOME ISSUES for parents going through a divorce in Colorado.
§14-10-115 of the Colorado Revised Statutes provides a comprehensive list……
(5) Determination of income. (a) For the purposes of the child support guidelines and schedule of basic child support obligations specified in this section, the gross income of each parent shall be determined according to the following guidelines:
(I) “Gross income” includes income from any source, except as otherwise provided in subparagraph (II) of this paragraph (a), and includes, but is not limited to:
(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;
(D) Payments received as an independent contractor for labor or services, which payments must be considered income from self-employment;
(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
(L) Trust income;
(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.
(II) “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.
Gross Income has a very broad definition in Colorado. Always hire an attorney to go over the details helping you make the best decisions for you and your family. Not understanding Gross Income leads to lasting, possible negative consequences.
If you have questions please give us a call at 720-722-0776
PARENTING TIME RELATED TO CHILD SUPPORT A Colorado family law attorney is essential to help you properly calculate, advise and consider the amounts that you should pay or receive for your child support.
The first and most often contentious issue for child support is parenting time. One of the most significant factors in calculating child support is how many over nights each parent has with the children. Read More
DEVIATION & EXTRA-ORDINARY EXPENSES In cases where the parents’ combined income exceeds a certain amount, or a parenting plan is negotiated with the idea that the children’s needs can be met for a lesser amount – or on a rare occasion a greater amount – the parents can ask the Court to deviate from the amount computed for the child support worksheet. Read More
CHILD SUPPORT CALCULATOR
While anyone can input the numbers into the worksheet, the legal expertise is necessary to know what numbers you should be using and how.
Not only is there the number of overnights to consider, but…
~ Is the same overnight schedule best for different kids?
~What is each parent’s gross income?
~Who is paying health insurance and what are the deductibles etc. for the plans?
~Is that parent who is paying health insurance actually paying or is in an employee benefit?
Teddi Ann Barry PC Features
When you decide to Divorce in Colorado, call Teddi Ann Barry, PC. Our mission is to resolve your family legal matters, quickly, efficiently, and in the most cost-effective manner possible. We have experience in all areas of family law, including high conflict litigation when necessary and permitted by Colorado Law
Teddi Ann Barry PC Family Law attorneys have offices throughout the state of Colorado, specifically including Denver, Cherry Creek, Vail, Avon, Steamboat. Our Home office is located in Denver at 899 Logan Street, Suite 203 Denver, CO 80203. Our phone number at this location is 720-722-0776. Our Vail location is at 30 W. Benchmark Road, Suite 214, Avon, CO 81620 970-949-0776.
Teddi Ann Barry PC focuses exclusively on Family law matters including, Divorce, Legal Separation, Mediation and Settlement Conferences, Common Law Marriage, Maintenance, Child Support, Parental Responsibility, Parenting time, Child Custody, Modifications, Paternity, Step-Parent Adoptions, Collaborative Law, Non-traditional Families and Pre and Post Nuptial agreements.
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