How Imputed Income Affects Child Support

Determining a parent’s imputed income for child support can be complex, especially when their actual earnings don’t align with their earning potential. In Denver, divorcing parents should understand how courts decide imputed income. If you need guidance on imputed income, the attorneys at Hogan Omidi have extensive experience handling these complex and sensitive cases with professionalism and care.

In this blog, we explore when courts decide to impute income, how it impacts child support obligations, and the key factors Colorado judges consider when making these determinations.

What Is the Imputation of Income?

Income imputation happens when a court determined maintenance or child support by using a higher income figure to a parent than their current income reflects. This may happen in cases of child support where a parent might be voluntarily unemployed, underemployed, or intentionally reducing their income.

The purpose is to ensure both parents meet their financial responsibilities toward their child’s well-being. Courts can impute income to account for what a parent should earn based on their skills, education, and job history.

Common reasons for imputing income include:

• A parent voluntarily leaves a job or takes a lower-paying role.
• Intentional underreporting of income to reduce support obligations.
• Avoiding responsibility through unemployment without valid cause.

To ensure fairness for both parents and the child, the court may calculate child support based on what the parent should be earning rather than their actual income.

How to Impute Income for Child Support

Imputing Income for Child Support: Key Steps and Considerations

Imputing income for child support involves careful analysis and evidence-based calculations. Typically, the parent requesting imputation, or their legal representative, must demonstrate that the other parent has the capacity to earn more than they currently do.

Key Steps in Imputing Income 

Research Earning Potential

Courts rely on local wages, job market trends, and industry averages to assess a parent’s reasonable earning capacity.

Review Employment History

A parent’s past employment is a critical factor. For instance, if they previously held a high-paying position but are now underemployed, their previous earnings will influence the court’s decision.

Evaluate Educational Background and Skills

A parent’s education, certifications, and professional skills reflect their earning potential. For example, a licensed physician working in retail could have their income imputed based on their professional capacity rather than their current earnings.

Assess the Local Job Market

Courts consider the availability of suitable jobs within the parent’s region and whether their skills align with roles that are in demand nearby.

Present Supporting Evidence

Evidence such as tax returns, pay stubs, witness testimony, or reports from vocational experts may be offered to substantiate claims of imputed income.

By addressing these factors, courts can determine an appropriate child support order based on a parent’s earning capacity rather than their reported income.

When Do Judges Impute Income? 

Judges will impute income if they determine a parent is deliberately underemployed or unemployed without a valid reason. This decision is based on specific evidence and circumstances, not speculation.

According to C.R.S. 14-14-111.5, income imputation is justified when:

• A parent is voluntarily unemployed or underemployed without a legitimate cause.
• A parent has taken a substantial pay cut for reasons unrelated to the child’s best interests.
• There are unexplained financial inconsistencies, such as significant expenditures despite reporting minimal income.

Judges also consider whether the parent’s employment changes or lifestyle decisions were reasonable. Exceptions may apply in cases involving responsibilities for other dependents from the same relationship or verified disabilities.    Another justification may be instances where a parent is pursuing an educational program that will result in future significantly higher income within a reasonable period of time.

Understanding the process of income imputation ensures that child support is calculated reasonably, reflecting a parent’s true financial ability to contribute to their child’s needs.

What Is the Biggest Factor in Calculating Child Support in Colorado?

Gross income is the most significant factor in calculating child support payments in Colorado. According to the Colorado Child Support Guidelines, the calculation considers both parents’ gross incomes before taxes, the number of overnights the child spends with each parent, and health insurance premiums and daycare costs.

The guidelines aim to ensure that both parents contribute equitably to their child’s care, and courts strive to replicate the financial resources the child would have had if the parents remained together. Other financial responsibilities, like existing child support or alimony, may also be factored into the calculation.

Get Help from a Denver Child Support Lawyer Today

Imputed income can make child support cases more challenging, sometimes impacting custody arrangements. At Hogan Omidi, we specialize in Colorado family law and are dedicated to securing fair outcomes for you and your child.

We’re here to support you if you’re seeking expert guidance through this process. Call us today at 303-391-9600 to schedule a consultation.