Can business income change affect child support appeal?

Question

I lost my post-judgment on additional child support because my ex-spouse recently changed his business structure from an S Corp to a C Corp, resulting in the loss of the K-1 form that was originally used for calculating additional child support. I believe that the income derived from his business should still be considered in the child support calculations despite this change. I wish to appeal the decision and need guidance from a tax lawyer or information from the IRS to verify that the business income remains valid for child support purposes and can be considered as new evidence for my appeal. Can you advise on whether this is possible?

James L. Arrasmith · Answer

You can still ask the court to impute income based on his business earnings even though the entity changed from an S Corp to a C Corp. Gather his W‑2 wages, corporate tax returns (Form 1120) showing profit distributions, and IRS wage and income transcripts to document the same underlying earnings you relied on before. 
 
To reopen or modify the support order you’ll file a motion citing changed circumstances and new evidence of income. Under most state guidelines, gross income includes wages, bonuses, dividends, and other distributions—regardless of corporate form—so those figures remain fair game for support calculations. 
 
Act promptly to meet your appeal or modification deadline and work with the court clerk or a tax adviser to identify exactly which returns and IRS transcripts will satisfy the judge. With that clear, equivalent financial data in hand, the court can factor his true earnings back into your child support determination.

Q: Can business income change affect child support appeal?