Strategically helping Colorado clients through divorce & custody cases
Published on:

COLORADO CHILD SUPPORT AND DAY CARE EXPENSES

Over the course of the last few decades, it has become more common place for both mothers and fathers, whether married or just parents of a child or children, to work. In fact, Colorado statute related to child support presupposes that both parents work and creates a duty, absent an exception, for each parent to be employed full time to the best of his or her abilities. In any two-income, intact household with little children, the reality is that some sort of child care will be needed for both parties to work, unless of course they work opposite schedules and never see each other. When a family unit splits up and a divorce or custody case is filed, the need for day care doesn’t go away. Fortunately, C.R.S. 14-10-115, the main statutory section related to Colorado child support, sets forth certain provisions regarding day care expenses and how such will be paid among the parties.

C.R.S. 14-10-115(9) indicates that the cost of work related, education related, and job search related child care incurred for a child of the case shall be split among the parties proportionate to their gross incomes. Thus, if there is $1000 per month incurred for day care, and mother makes $100,000 per year and father makes $50,000 per year, statute would have mother paying approximately two-thirds of the monthly child care obligation and father paying approximately one-third. Statute does not make specific mention as to which party is paying the actual cost directly to the child care provider, nor preclude both parties from contributing directly to the provider. Likewise, statute does not necessarily indicate that the parties even have to use the same daycare. It just indicates that costs shall be split proportionate to adjusted gross incomes of the parties.

For purposes of minimize conflict related to payment of or reimbursement for child care, C.R.S. 14-10-115(9) also indicates that the child care costs incurred for any of the three endeavors shall be “added to the basic support obligation.” This is generally accomplished by adding the monthly daycare figure into the child support worksheet, or software used for calculating the monthly child support amount. The software used by Colorado family law attorneys will take the monthly child care amount, or amounts, incurred, and apportion it proportionately to the parties’ incomes listed on the child support worksheet. The actual monthly child support figure shall then go up or down according to whom is paying what amount for daycare. For example, let’s say that a monthly child support obligation of $500 exisits with mother paying father. Let’s say that no daycare has been factored in to arrive at that calculation. Due to changes in the parties’ schedules, a need for work related child care arises to the tune of $1000 per month. Using the same family set forth in the paragraph above, lets say father, making $50,000 per year, or 1/3 of the combined income, is the one who pays the actual funds to the provider. In this instance, the approximately $667 per month of the day care costs which are allocatable to mother would be added to the $500 child support figure and mother would then be required to pay approximately $1167 per month in child support. Conversely, if mother were paying the actual child care to the provider, the child support owed to father should, in theory, go down by roughly $333 per month. These are approximate figures and do not factor in various adjustments or an adjustment pursuant to statute based on the federal income tax credit for child support.

Having the cost of child care built into the child support calculation is the norm and generally what parties agree to or what courts will generally order. Building child care costs into the child support calculation, in theory, guarantees reimbursement for the other party’s share of day care and alleviates the need to add another layer of financial entanglement between the parties or the potential headaches that can come with such. That being said, there are instances in which paying the cost of child care as a separate expense might be advantageous to both parties.

Though the monthly cost of child care is optimally known ahead of time, the reality is that there are some cases in which the cost of child care fluctuates based on changing work schedules, such as with a firefighter or nurse, whose schedule might changes every six months. In these instances, it can be difficult to calculate an average monthly figures for purposes of putting such into a child support worksheet. As such, the parties might agree, or the court might order, that one party pays the day care expense and provides the other party with proof of such on a monthly, weekly, or bi-weekly basis. The other party would then have a certain amount of time to reimburse the first. This type of a structure allows for flexibiltiy. Furthermore, with wide fluctuations in child care costs, to the point of being unable to arrive at a monthly average, adding child care costs into the child support worksheet could, in theory, open the door to frequent child support modifications, depending upon whether the change in day care costs with each cycle of fluctuation triggered a 10% or more change to the bottom line child support amount. No one wants to come back to court every few months due to swings in child care costs. In these situations in which child care fluctuates and is not built into worksheets, lawyers should keep in mind some protective language, like indicating any payments not reimbursed by the other party are “in the nature of child support” and perhaps build in other language to ensure or assist with compliance and/or reimbursement.

When establishing or modifying child support, parties should also keep in mind that courts, and the other side, are going to want actual proof of day care costs incurred prior to including such in a child support calculation or order. One of the hot button items that can come up in cases relates to parties using friends or family members for child care. There is inherent suspicion on the part of the court and other party if one parent decides that he or she is going to use Grandma as the child care provider. In these instances, one should be ready to provide proof that Grandma is actually being paid, such as copies of cancelled checks to her. Conversely, the other side should insist on that proof, which should be more than just receipts signed by Grandma. Additionally, courts are not going to generally enter orders or build in speculative child care costs. “We’ll, I should be returning to graduate school in the fall,” “If I actually find a job my day care will be X,” or “I plan on using this day care 9 months from now when Timmy starts first grade” are not going to cut it. Parties must be ready to provide evidence as to actual costs or show a scenario in which future costs are cognizable.

In most cases, people within have joint parental responsibilities as to the making of decisions and will, thus, be required to jointly select a child care provider. In instances in which there is sole decision making or the parties cannot agree, but day care is a must for work to happen, parties can generally move forward with selecting a provider. However, the selection must be reasonable as to cost and C.R.S. 14-10-115(9) makes reference to the costs to be divided being in line with standards. Therefore, neither party can go out, hire a $5000 per month live in au-pair and try to stick the other party with his or her income proportionate share. Parties should also keep in mind that the child care costs to be split do not inc
lude costs for baby sitters or any other reason but for the three endeavors stated above.

Finally, there are also tax implications related to child care. IRS code allows for certain deductions or credits related to child care costs paid during the tax year. Being allowed to claim these credits or deductions can tie into the right to claim head-of-household and/or the dependency exemption. Parties should consider speaking to an accountant prior to arriving at an agreement to see what tax implications of any day care order will arise. Generally, the primary residential parent will be the one allowed to claim the child care credit. In light of this fact, statute, and the child support worksheet, indicate that the amount of child care to be divided between the parties should technically be the net amount of what is paid. Thus, the amount a party will receive for the child care tax credit is deducted off of the gross monthly child care paid prior to apportionment between the parties. Attorney software has a box to check to turn off the factoring in of the deduction if the situation warrants such.

Set forth above are general family law tenets related to Colorado child support and day care costs. For further information, it would be wise to contact an attorney. It never hurts to know your options or to have your current orders assessed. It takes money to raise a child. Sometimes it takes the court system to ensure that each parent bears his or her fair share of that cost.