Article by: Brett W. Martin, Esq.
The Colorado legislature has provided that, in determining a parent's income for purposes of calculating child support, the income to be counted is that from any source, with certain defined exceptions. The child support statute sets forth a non-exclusive list of what is included in the definition of "income." The relevant portions of the statute are set forth below.
Excerpts from C.R.S. § 14-10-115:
(a) "Adjusted gross income" means gross income, as specified in subsection (5) of this section, less preexisting child support obligations and less alimony or maintenance actually paid by a parent.
(c) "Income" means the actual gross income of a parent, if employed to full capacity, or potential income, if unemployed or underemployed. Gross income of each parent shall be determined according to subsection (5) of this section.
(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;
(G) Severance pay;
(H) Pensions and retirement benefits, including but not limited to those paid pursuant to article 64 of title 22, C.R.S., articles 51, 54, 54.5, and 54.6 of title 24, C.R.S., and article 30 of title 31, C.R.S.;
(L) Trust income;
(N) Capital gains;
(O) Any moneys drawn by a self-employed individual for personal use;
(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) Taxable distributions from general partnerships, limited partnerships, closely held corporations, or limited liability companies;
(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.
The Colorado Court of Appeals has held that the child support statute defines income for child support purposes as income from "any source", with limited and specified exclusions. Marriage of Campbell, 905 P.2d 19, 20 (Colo.App. 1995) (income from exercise of stock options to be included). The exceptions to sources of income are limited to those enumerated in the child support statute. Marriage of Campbell; Marriage of Tessmer, 903 P.2d 1194 (Colo.App. 1995) (interest and dividends from IRA to be included, regardless of whether accessible without payment of a penalty or not).
In short, "Gross Income" means income from any source except what is specifically excluded by the child support statute. Seems fairly simple….
Concerns that arise in the trial court: The judge or magistrate "forgets" that the definition of gross income is all income from any source and that the list of examples of what is included in the statute is prefaced with "but is not limited to", and decides that if it is not on the list, then it is not included in calculating the parent's income. This is opposite of what the court is supposed to do, but is the reality of what sometimes happens in the courtroom. Yes, the decision can be appealed - but, is the cost to appeal worth the possible gain in a corrected decision? Many times the benefit of a corrected decision is greatly outweighed by the cost of pursuing an appeal.
The specific exclusions from "gross income" are set forth in C.R.S. § 14-10-115(5)(II):
(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; and
(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.
Questions and problems that may arise in the trial court:
The questions posed above have all been raised in recent trial court level cases. Stay tuned - perhaps we will have an answer, someday.
Martin Law FirmFather's Rights Attorneys
Sunday 19 May
Determining Income for Child Support