Federal and state law requires that if a parent owes child support, part of that parent's wages, periodic income, or other income must be assigned (withheld) to pay support. These laws help guarantee timely and regular child support payments. Income assignment is the most reliable method of making sure support is paid.

As a Colorado employer, you may receive a child support order or notice from:

• A local Colorado child support enforcement agency;
• A child support enforcement agency in another state;
• A private attorney; or
• A clerk of the court.

Colorado employers must honor all of these requests. If you get a Notice of Income Assignment from another source, you may wish to consult an attorney. The notice or order tells you how much to withhold from your employee for current support, delinquent support (arrears), or both. It also tells you where and how to send payments and explains your rights and responsibilities.

You must withhold income from wages, salaries, tips, commissions, vacation pay, bonuses, worker's compensation, disability payments, payments from a pension or retirement program, and interest; a sole payment or lump sum; and irregular income.

How Much to Withhold

You must withhold the entire amount of the child support order up to a maximum amount of the employee's net disposable income, depending on the employee's number of dependents. Colorado income assignment orders will tell you how much to withhold and will equal:

• 65 percent if the employee is not supporting other dependents and the child support owed is more than 12 weeks old.
• 60 percent if the employee is not supporting other dependents and the child support owed is less than 12 weeks ago.
• 55 percent if the employee is supporting other dependents and the child support owed is more than 12 weeks old.
• 50 percent if the employee is supporting other dependents and the child support owed is less than 12 weeks old.

In order to determine the amount to withhold:

1. Calculate the employee's net disposable income by subtracting FICA, withholding taxes, and children's health insurance premiums from the employee's gross income.
2. Multiply the maximum withholding percentage from the list above, depending on the employee's number of dependents and length of time that the child support order has been owed.
3. Multiply the amount from step 1 by the percentage in step 2 to determine the maximum amount to withhold. If the figure listed on the child support order is greater than this amount, send the entire amount to the address on the order.

The following example is for an employee who is paid $30,000 a year ($1,153 bi-monthly)

You pay the employee $1,153 every two weeks, and deduct approximately $167 in federal income taxes, $86 in FICA and $38 for dependent health insurance.

Total deductions equal $291.

The cover sheet that accompanies the Notice of Income Assignment informs you that the employee is responsible for paying 50 percent of his or her disposable income towards the child support obligation.

Subtract $291 from $1,153 to determine the employee's net disposable income of $862.

50 percent of $862 is $431, which is the total amount that you can withhold (even if the income withholding order is higher).

Calculating Tips as Income

Calculate an employee's income by adding the salary to the tips that he or she declares. Use this figure to calculate the amount of income to withhold, using the disposable income formula above. In some cases, this means that you will withhold the full amount of the person's paycheck. Employers do not have to collect tips from their employees to pay the full amount of the income assignment.

The following example is for an employee who is paid $8,000 a year and receives $12,000 in tips.

The cover sheet that accompanies the Notice of Income Assignment informs you that the employee is responsible for paying 65 percent of his or her disposable income towards the child support obligation.

You pay the employee $308 every two weeks, and deduct approximately $111 in federal income taxes, $57 in FICA and $25 for dependent health insurance.

Total deductions equal $99.

The employee reports tips of $461 every two weeks.

Subtract $193 from the total of salary plus tips ($308 + $461 = $769) to determine the employee's net disposable income of $576.

Sixty-five percent of $576 is $374, which is the total amount that you can withhold. Since you only pay the employee $308 each pay period, and you are required to withhold up to $374, you only issue the employee a paycheck for $66. The employee is responsible for paying the rest of the obligation from his or her tips.

(If you paid the employee less than $308 every two weeks in the above example, you would not issue him or her a paycheck at all since the salary was less than the total disposable income you were required to deduct.)

Priority of Withholding Payments

In Colorado, you must honor income withholding orders in the following order of priority:

1. All orders for current child support and spousal maintenance if it is included in the child support order;
2. All orders for medical support;
3. All orders for past due child support and medical support (arrearages); and
4. All orders for spousal maintenance only.

Where to Send Payments

Federal and state laws require each state to establish a centralized location, or state disbursement unit, to receive and disburse support payments withheld under a Notice of Income Assignments. For income assignments issued by Colorado, send payments to:

Family Support Registry
P.O. Box 2171
Denver, Colorado 80201-2171

Label the payments with the employee's name, IV-D case number, Family Support Registry (FSR) Account Number, FSR Employer ID, Social Security Number, amount of the payment, and date withheld. The date of withholding is the date the employee no longer has control over wages withheld for child support.

When to Send Payments

Send the payments no later than 14 days after the mailing date of the income assignment notice. The payment must be sent within seven business days of the date of each deduction.

Combining Payments

If you have more than one employee with an income assignment, you may combine all of the payments going to the Family Support Registry into one check. You must provide the following information for each assignment and each employee to ensure that the correct recipients receive the funds:

• Court case number
• Employee name and Social Security Number
• FSR account number (if applicable)
• Amount withheld from each employee
• Whether the employee's dependents are eligible for medical insurance
• Payroll date the support was withheld.

Medical Insurance Withholding

Provide the following information to Child Support Services of Colorado on the medical insurance withholding form provided. This information is required when the first income deduction occurs and every year after. Include information about the employee's:

• Insurance carrier
• Policy number
• Group number
• Effective date of coverage
• Total cost (to employee)

Charging for Income Assignments

You may deduct a fee of up to $5.00 per month from the rest of the employee's paycheck to offset the cost of processing an employee's child support payments each month. You cannot deduct the $5.00 from the child support payment that you remit.

Multiple Income Assignments

Some employees may receive different income assignment orders for different children.

By law, employers must withhold payments for current support obligations before withholding payments for delinquent obligations. However, the total amount of payments for current support and delinquent support from all orders combined cannot exceed the maximum amount (from 50 - 65 percent, see "How Much to Withhold" above) of the employee's net disposable income. Net disposable income is determined by subtracting FICA, withholding taxes, and children's health insurance from gross income.

If the child support amount in the notice is greater than the maximum amount of the employee's net disposable income, prorate the child support between the different orders, following these steps:

1. Determine the net disposable income and the total of all current child support ordered to be withheld for the employee.
2. Calculate the percentage that each current child support order contributes to the total current child support owed.
3. Allocate the net disposable income (50 - 65 percent of net disposable income) according to the percentage that each order contributes to the total current child support ordered.
4. In some cases, the total current child support obligations can be withheld without exceeding the maximum limit, but withholding additional funds to pay for arrearages would exceed the maximum. In these instances, use the same prorated process to allocate withholding for arrears (follow the "Priority of Income Assignments" explained above in prorating the remaining disposable income and allocating among the various assignments).

Example of Prorating Multiple Income Assignments

An employee has:

• Net disposable income of $900 per month
• One child support order (A) for $250
• One child support order (B) for $200
• One child support order (C) for $150
• A total child support monthly obligation of $600
• A maximum net disposable income that can be withheld of 50 percent

1. After subtracting taxes, FICA and children's health insurance premiums, the employee's income is $900. Therefore, the net disposable income eligible to, be withheld is 50 percent of $900 or $450. The employee's total obligation is $600 a month, but only $450 can be withheld.
2. Determine the percentage that each child support order contributes to the total obligation ($600).

Order A=$250/$600 or 42%
Order B=$200/$600 or 33%
Order C=$150/600 or 25%

3. Allocate the available income. Multiply the percent calculated above by the amount that can be withheld ($450). The result is the amount to withhold for each case when you send the $450 to the Family Support Registry.

Order A=$250/$600 or 42% x $450 = $189.00
Order B=$200/$600 or 33% x $450 = $148.50
Order C=$150/$600 or 25% x $450 = $112.50
                                      Total       $450

Income Withholding from Other States

Under the Uniform Interstate Family Support Act (UIFSA), employers are required to honor income-withholding orders from other states. Send payments requested by other states to the registry indicated on the notice sent by that state.

UIFSA contains the following provisions for income withholding:

• An agency in another state may send an income withholding order or notice directly to an employer in Colorado. You must honor the order or notice. All withholding orders or notices are required to be in a standard format. While forms may have a different overall appearance from state to state, they should contain all the information you need to withhold and mail payments. The following information should appear in the same order on all forms you receive:
  • Employee/Obligor's last name, first name, and middle initial (if known)
  • Employee/Obligor's social security number
  • Case identifier (or other identifier) used for recording the payment
  • Address to which payments are sent
  • Custodial parent's last name, first name, and middle initial (if known)
  • Child(ren)'s name(s) and date of birth listed in the support order
  • Name of state that issued the underlying child support order
  • Dollar amount to be withheld for payment of current child support
  • Time period that corresponds to the amount in #8 (e.g., current support due per month)
  • Dollar amount to be withheld for payment of past-due child support
  • Time period that corresponds to the amount in #10 (e.g., past-due support due per month)
  • If any other amounts are to be withheld, the notice/order should indicate the corresponding time period (e.g., month)
• You are required to provide a copy of the other state's withholding order or notice to the employee immediately upon receipt.
• If you fail to honor the other state's order or notice, the same penalties apply as if the order or notice had been issued by a court or agency in Colorado.
• The employee may contest the other state's order or notice. If the employee decides to contest the other state's order or notice, the employee must send a letter to the agency that issued the order or notice. Continue to withhold support payments until notified to change or stop withholding by the agency that issued the order or notice. If you do business and have a registered agent in another state, and you or your registered agent receives an income withholding order or notice from the other state, follow the laws of the state where the employee works, as described in Examples 1 and 2.

Link to Frequently Asked Questions about Income Withholding