What Is Considered Income When Deciding Child Support?

What Is Considered Income When Deciding Child Support?

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When divorcing couples in Colorado have children, the court must determine each parent’s responsibility to contribute toward the children’s expenses, based on their parenting time schedule or custody and visitation arrangement. Child support is an amount of monetary support one parent must pay the other to contribute toward the expenses of raising children.

The state uses guidelines to arrive at a presumptive amount of child support based on the number of children, the amount of time that each parent has the responsibility of day-to-day care of the children, the assets of each parent, the lifestyle the children enjoyed before the divorce, and the income of both parents. But when it’s time to make this calculation to determine which parent pays child support to the other, it’s important to know what the Colorado court considers as income when it comes to the child support determination.

What Is Considered Income When Deciding Child Support?

Understanding Income in Colorado’s Child Support Guidelines

Colorado courts base their child support guidelines on each parent’s gross income—or their income before tax deductions. In the best-case scenario, divorcing spouses can calculate their own child support responsibilities and come to a mutually agreed-upon determination for child support payments that a judge will approve and sign off on. If that isn’t possible, then the judge will make the determination. Either way, it’s essential to consider all forms of income when making the child support determination including:

  • Wages, salary, and tips
  • Required overtime pay
  • Commissions
  • Bonuses
  • Self-employment payments
  • Contractor payments
  • Royalties
  • Severance pay
  • Investment income
  • Retirement, social security, workers’ compensation, unemployment, or disability benefits
  • Rental property income
  • Trust income
  • Business income
  • Monetary prizes or gifts
  • Spousal maintenance

Many divorcing spouses are surprised to learn that spousal maintenance (alimony) is an amount of income the courts consider when making a determination for child support. Generally, if you receive spousal maintenance, it increases your income which lowers the amount you’ll receive in child support. If you pay spousal maintenance to an ex-spouse, it lowers the amount you’ll have to pay in child support.

What Isn’t Considered Income When Deciding Child Support in Colorado?

Only a few specific types of revenue are exempt from the court’s classification of income, including:

  • Child support
  • SSI benefits or food stamps
  • Income from a second job (beyond 40 hours per week)
  • A child’s social security benefit
  • Undistributed retirement benefits, unless the distribution is available without penalty

Some divorcing spouses may attempt to leave a job during divorce in order to reduce or eliminate the amount they’ll have to pay in child support. It’s important to understand that the courts can estimate a parent’s child support obligation or “impute” income to that parent based on what they could reasonably earn based on their work history and education.

Reporting Income During Divorce

If you are in the process of divorce and have questions about what the courts consider income in Colorado, you should speak to your Denver divorce attorney about your specific sources of revenue. You must submit financial disclosure forms at the beginning of the divorce process which accurately lists all sources of income under the penalty of perjury. You could face perjury charges if you attempt to hide income for the purpose of reducing a child support obligation. Perjury is a criminal charge with serious consequences.