Income for Purposes of Support – Student, Retirement and Rental Income

Are you involved in a divorce or child custody case involving income for support purposes? An experienced divorce and child custody lawyer and team can guide you through the legal process to assist in exploring your options. You have one bite at the apple in the court system so make it count.

In order to calculate support, courts first must determine income. Income is broadly defined in both C.R.S. §14-10-114(8)(c)(I) and C.R.S §14-10- 115(5)(a)(I). Parties often focus on W-2 income, however many people often have other sources of income or they are self-employed which requires a more detailed analysis. Following is information on other common income sources:

Another form of income is certain types of student loans. Tuition assistance is income if available for discretionary use or it reduces daily living expenses In re Marriage of Tooker, 444 P.3d 856, 860-861 (Colo. App. 2019). If the assistance is used to pay for the tuition or books itself, it does not count. Some students loans are obtained to cover living expenses, and some to pay for tuition and books.

Regarding tuition assistance, the Colorado Court of Appeals in In re Marriage of DePumpo concluded that tuition assistance paid directly to a college is not considered income for child support or maintenance purposes. This is because the funds are not available for daily living or discretionary expenses. In re Marriage of DePumpo, 522 P.3d 732 (Colo. App. 2022).

In a dissolution, retirement pay can either be divided between the parties as property, or treated as income. Pension payments and retirement benefits actually received that have not previously been divided as property are income. C.R.S. §14-10-114(8)(c)(I)(H). Earnings or gains on a retirement account, including an IRA, are not included as income unless a party takes a distribution. C.R.S. §14-10-115(5)(a)(II)(E). If a distribution may be taken without penalty for early distribution and the party does not take the distribution, the court may count as income the distribution that could have been taken. C.R.S. §14-10-114(8)(c)(II)(E). Additionally, VA and social security disability payments are income. In re Marriage of Nevil, 809 P.2d 1122, 1123 (Colo. App. 1991), and C.R.S. §14-10-114(8)(c)(I)(P).

Some parties rent out homes and earn income through the rental. Income earned through the rental of housing is income which is reduced by the ordinary and necessary expenses to produce the income. C.R.S §14-10-114(8)(c)(I)(J) and C.R.S. §14-10-115(5)(a)(I)(J). Rental property information is often found on a Schedule E of the income tax return.

A knowledgeable and experienced divorce and family lawyer and legal team can guide you through Colorado Springs divorce and family law matters by negotiating, mediating and litigating on your behalf. You can focus on moving on to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has more than 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find at https://store.lexisnexis.com/products/colorado-family-law-with-forms-skuSKU02903. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation.