Divorce and the New Year

By Stephen J. Plog

“Should auld acquaintance be forgot? And never called to mind…,” the famous words from the classical, New Year’s musical standard. 2015 is gone; long reign 2016. In Colorado family law cases, there are various rules and concepts tied into the New Year which give couples and families things to think about in terms of finances, financial planning, childcare expenses, and other aspects of their cases.

Below are a few of the New Year-related topics that I, as an experienced Denver divorce attorney, have repeatedly advised clients about over the years:

1. The New Year brings a new time range related to payment of child support and taxes. For purposes of claiming children (the income tax dependency exemption) on your federal taxes, you must have paid all child support for the year in full or you lose the right to take the exemption. A new year means a new time frame for asserting that right. You can also think of it as a clean slate for making sure you get your child support paid on time.

1. Also relating to taxes, a new year can affect your filing status. Like any other married couple, parties in a Colorado divorce case are bound by IRS codes and regulations. Parties in a divorce case, when looking at tax implications, should be aware that if they are divorced in a specific tax year, they will be required to file as single people. If married, they can either file jointly or as married-filing-separately. When finalizing a divorce, particularly towards the end of the calendar year, parties need to be cognizant of this rule. If it behooves them to file jointly one last time to gain a tax advantage, they need to take steps to make sure their decree formally ending their marriage does not get signed off by the court until January 1. In my experience, most judges will be willing delay entry of decree until after the New Year to accommodate.

1. When it comes to child medical expenses outside of the set, monthly child support amount, Colorado statute (specifically C.R.S. 14-10-115[10][h][II]) indicates that any expenses after the first $250 per year, per child, shall be split between the parties proportionate to their incomes. Beginning January 1, a new time period for accounting and allocating these expenses arises. They do not carry over from year to year in terms of getting to the $250 cap.

1. New Year’s Day also brings a new accounting period for purposes of alimony (maintenance) and tax accounting. Pursuant to IRS Code, spousal support paid is tax deductible to the payer and must be claimed as income by the payee. As with other tax items, this is accounted for annually. Parties to a divorce case should be aware that payments are allocated to the tax year they are paid in. For planning purposes, it is wise to make sure that final year payment is made before January 1.

1. Relating to child visitation or “parenting time,” most final Colorado custody orders or agreements contain a holiday schedule. That schedule will generally list the major holidays. It will also allocate the specific holidays to the parents on an “even” or “odd” year basis. For example, a custody agreement might say, “father shall have the parenting time with the children for Halloween in even years, mother shall have it in odd years.” The agreed-to or court-ordered holidays will generally be balanced so that each parent has a few holidays with their children each year.

In any Colorado divorce or custody case, it is important for parties to know the changes, rights, and responsibilities that can come with the New Year and how to deal with them. Contact the experienced Denver-area family law attorneys at Plog & Stein, P.C. to help you understand your options and to assist you in your divorce, custody, and child support planning needs so that 2016 is better than 2015.