What Counts as Income for Child Support and Alimony in Colorado

If you and your spouse are divorcing, child support and spousal maintenance both start from the same place: each party’s gross income. Getting that number right is the single biggest driver of both calculations, and it is where cases are most often won or lost. This page inventories what Colorado counts, what it leaves out, and how the court handles variable income and a parent who is not working.

Why Income Comes First

Colorado child support is set on an income shares model. It combines both parents’ incomes, reads a basic obligation from a statutory schedule, and divides it in proportion to each parent’s share.

Alimony in Colorado, called maintenance, is not automatic, but when the court considers it the advisory guideline formula also runs on gross income. The maintenance statute uses the same income definition as the child support statute, so one inventory serves both.¹

Income Included in Gross Income

Gross income means income from any source, before taxes and other deductions, except for the specific exclusions listed below. The statute names these sources without limiting the list to them:²

• Salaries, wages, and tips, including tips imputed to bring earnings up to minimum wage for the hours worked.
• Commissions, bonuses, and severance pay.
• Payments received as an independent contractor, treated as self-employment income.
• Dividends, interest, capital gains, rents, royalties, and annuities.
• Trust income.
• Pensions and retirement benefits.
• Social Security benefits received by a parent, including disability benefits paid because of that parent’s own disability.
• Workers’ compensation, unemployment insurance, and disability insurance benefits, plus any insurance proceeds that replace wages.
• Monetary gifts and monetary prizes. Lottery winnings count only if the prize is large enough that Colorado lottery rules require payment at the lottery office.
• Income from partnerships, closely held corporations, and LLCs. A passive minority investor with no managerial role may be limited to actual cash distributions.
• Expense reimbursements and in-kind payments from an employer or business, if they are significant and reduce personal living expenses.
• Maintenance received, adjusted by a multiplier when it is not taxable to the recipient.
• Overtime pay, but only when the employer requires it as a condition of employment.

A service member’s housing and subsistence allowances are in-kind payments that reduce living expenses, so they are usually counted. VA benefits are income from a source the statute does not exclude. Have the figures verified against the pay statement rather than estimated.

Income Excluded From Gross Income

The statute also lists what does not count:³

• Child support received for another child.
• Benefits from means-tested public assistance, such as Colorado Works, SSI, SNAP, and general assistance.
• Income from additional jobs that push a parent past 40 hours a week or past full-time employment.
• Social Security benefits paid to or for the children because of a stepparent’s death or disability.
• Earnings or gains inside a retirement account, such as an IRA, until a distribution is taken. If a penalty-free distribution could be taken and is not, the court may consider it. That applies when the parent is not employed full-time and the account did not come from the property division.

For self-employment, rental, and royalty income, gross income is gross receipts minus the ordinary and necessary expenses required to produce it. Accelerated depreciation and investment tax credits do not count as expenses, and the court can disallow any other expense it finds inappropriate for support purposes.⁴

Variable Income, Bonuses, and Second Jobs

Income that swings month to month is averaged, usually from the prior year’s tax return or year-to-date earnings, and regular bonuses are income. Income from a second job beyond full-time hours is excluded from gross income. It can still be a reason for the court to deviate from the guideline, and so can consistent overtime.

Income statements must be verified with documentation of current and past earnings: pay stubs, employer statements, or receipts and expenses for the self-employed, supplemented by the most recent tax return.⁵ Expect to produce all of it, and expect the other side to ask for more.

Variable income, business income, and in-kind benefits are where a worksheet goes wrong most often. Johnson Law Group offers a no-pressure consultation to build the income side with you before either calculator runs, so schedule a consultation and bring your pay records.

Potential Income When a Parent Is Not Working

A parent who is not working is not automatically treated as having zero income. If a parent is voluntarily unemployed or underemployed, support is calculated on potential income.⁶ Three parents are exempt: one who is physically or mentally incapacitated, one caring for the parties’ child under 30 months, and one incarcerated for 180 days or more.

Potential income is not a flat minimum-wage figure, and the court must document it from the parent’s actual circumstances.⁷ Those include assets, employment and earnings history, job skills, education, age, health, criminal record, record of seeking work, the local job market, and prevailing local earnings. Only when no such information exists does the court fall back on a reasonable rate of pay for a 32-hour week, 50 weeks a year.

A parent is not underemployed in three situations. The job is temporary and should lead to higher income, it is a good-faith career choice that does not unreasonably cut support, or the parent is in a qualifying program. The same potential-income rule applies to maintenance, with the same three exceptions.

From Income to the Support Number

Once each parent’s gross income is set, the court subtracts preexisting child support actually paid and maintenance actually paid to reach adjusted gross income, then combines the two figures.⁸ Each parent’s percentage of the combined figure is that parent’s share of the basic obligation from the schedule.

Parenting time, child care, health insurance, and extraordinary medical costs then move the number. How Colorado child support is calculated walks through those steps. The Colorado child support calculator and Colorado alimony calculator let you test the result once the income inputs are right.

If the paying parent’s income is low, Colorado’s minimum child support rules apply a floor and caps that the calculators may not show.

Talk With a Colorado Family Law Attorney About Your Income Picture

When it comes to divorce, the question of what counts as income for child support and maintenance in Colorado decides more than any other input. Johnson Law Group is here to help.

The attorneys at Johnson Law Group document and dispute income on both sides of the worksheet and will give you a clear read on what counts. Schedule a free consultation through our Colorado offices, and we will serve as your North Star from here.

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