What Is Imputed Income?

Posted in Child Support,Colorado Laws,Spousal support on May 3, 2019

Imputed income is a court-ordered income amount that may apply to child support cases in which one parent tries to escape financial responsibility by lying about his or her income level. The divorce courts in Fort Collins take child support orders very seriously. They will handle a parent that tries to act outside the system by imposing an imputed income amount on the child support decree. If you have specific questions about your assets or computing income, speak to a Fort Collins divorce lawyer today.

About Colorado Child Support Orders

The courts in Colorado may issue a child support order in a divorce case involving children. The purpose of a child support arrangement is to maintain the child’s quality of living after a divorce. The courts believe a child should not have to suffer a decrease in funds, food, clothing, etc. because of a divorce of the parents. To keep the child’s financial situation the same post-divorce, the courts may order a child support requirement to one spouse – typically, the non-custodial parent.

A parent with a child support order will have to pay the amount stated in the order until the month that a child out of high school turns 18, or until the month a full-time high school student turns 19. Parents have the option of working together to determine how much child support one spouse should pay. If they cannot agree on an amount, however, the courts will set child support payments. A judge will calculate the amount of child support based on the Income Shares Model, which looks at the gross incomes of both parents.

When Might the Courts Impute Income?

During a child support case in Colorado, it is up to both parents to accurately report their income to the courts. The courts will then use these incomes, plus information about what the family usually spends on the child, to assign the noncustodial parent’s share of support. A parent may try to cheat the child support system by reporting a lower income level than he or she actually earns. The parent might think that this will punish the parent by paying less. Since child support payments are for the child, however, and not the spouse, the courts will not allow a parent to get away with reporting an incorrect income.

If the courts discover that a parent is trying to shirk his or her child support responsibility by lying about income, they will assign an involuntary income amount to that parent. This is called imputed income. Imputed income may also be a necessity if a parent is intentionally avoiding work opportunities to remain unemployed or underemployed. To calculate imputed income, a judge will analyze the parent’s earning potential based on education, work experience, location, and other factors. Then, the judge will issue a child support order based off the imputed income, regardless of the parent’s actual income.

For example, if a parent was earning $100,000 a year, but then the year of the divorce switches to a job earning $50,000, a judge may assign an imputed income at the $100,000 salary level. The parent would then have to pay the amount based on $100,000, even if he or she has a job that pays $50,000. Each case is unique. A judge will assess the specific situation to make sure the parent in question actually has the ability to make more but is intentionally making less, or that the parent is covering up his or her actual income. Then, the judge will assign an imputed income amount he or she deems appropriate.

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