Pursuant to C.R.S. 14-10-115, the statutory section regarding establishment of Colorado child support, the primary financial factor leading to a calculation of support is a litigant’s incomes. As discussed in prior postings, there are basic figures, such as income, number of children, and number of overnight visits per year the payor has with the children, that go into generation of a monthly child support amount. Child support is generally easily calculated when there are two people to the equation, both of whom have traditional jobs with readily discernable income. However, when one person is a business owner, or self employed, the analysis of what income figure should be used for that person becomes more complex. Likewise, challenges can arise related to collection of child support from that self employed person. This posting will address both issues as may arise in the legal arena.
As Denver area child support attorneys, we have seen almost any scenario imaginable related to child support. The one scenario requiring perhaps the most scrutiny relates to ascertaining income for a self employed person. This task can arise not only related to the other party’s income, but also our own clients. As a starting point, C.R.S. 14-10-115(a)(1) sets forth definitions of what is or is not income for child support purposes. Subsection (D) states, “Payments received as an independent contractor for labor or services, which payments must be considered income from self-employment.” Subsection (O) states, “Any money drawn by a self-employed individual for personal use that are deducted as a business expense, which money must be considered income from self employment.” Subsection (W) states, “Income from general partnerships, limited partnerships, closely held corporations, or limited liability companies….” In essence, the funds one takes for personal use under any of these scenarios is considered income for child support calculation purposes.