The Sworn Financial Statement: Calculating your “gross monthly income” – part 1

The Sworn Financial Statement is an important tool for the Court and your attorney to understand your financial position in any family law case. Whether you are facing a divorce, a custody case or modification of custody or a child support matter, it is mandatory that you complete a Sworn Financial Statement and include proof (documents like bills, pay statements, bank accounts, and leases, etc.).

The first page of the SFS includes the first challenge you will confront. That challenge is accurately calculating your “gross monthly income”. While it may sound simple, it can be confusing and sometimes complicated. The Sworn Financial Statement requires you to list all income from any source before any deductions or taxes are taken out. What gets included as “income”? Colorado statutes list income as including:

Sworn Financial Statement
  1. Income from salaries;
  2. Wages, including tips declared by the individual for purposes of reporting to the federal internal revenue service or tips imputed to bring the employee’s gross earnings to the minimum wage for the number of hours worked, whichever is greater;
  3. Commissions;
  4. Payments received as an independent contractor for labor or services, which payments must be considered income from self-employment;
  5. Bonuses;
  6. Dividends;
  7. Severance pay;
  8. Pension payments and retirement benefits actually received that have not previously been divided as property in this action;
  9. Royalties;
  10. Rents;
  11. Interest;
  12. Trust income and distributions;
  13. Annuity payments;
  14. Capital gains;
  15. Any moneys drawn by a self-employed individual for personal use that are deducted as a business expense, which moneys must be considered income from self-employment;
  16. Social security benefits, including social security benefits actually received by a party as a result of the disability of that party;
  17. Workers’ compensation benefits;
  18. Unemployment insurance benefits;
  19. Disability insurance benefits;
  20. Funds held in or payable from any health, accident, disability, or casualty insurance to the extent that such insurance replaces wages or provides income in lieu of wages;
  21. Monetary gifts;
  22. Monetary prizes, excluding lottery winnings not required by the rules of the Colorado lottery commission to be paid only at the lottery office;
  23. Income from general partnerships, limited partnerships, closely held corporations, or limited liability companies; except that, if a party is a passive investor, has a minority interest in the company, and does not have any managerial duties or input, then the income to be recognized may be limited to actual cash distributions received;
  24. Expense reimbursements or in-kind payments received by a party in the course of employment, self-employment, or operation of a business if they are significant and reduce personal living expenses;
  25. Alimony or maintenance received pursuant to a preexisting court order with a payor who is not a party to the action, as adjusted, if applicable; and
  26. Overtime pay, only if the overtime is required by the employer as a condition of employment.

(to be continued)