When Business “Pass-Through” Income Can Inflate Florida Child Support

In Florida, child support disagreements often hinge on one key factor: income. While some parents receive a regular paycheck, others operate businesses or report earnings on tax returns that don’t necessarily represent the actual funds available to cover support obligations. This distinction is critical because support calculations must reflect a parent’s true financial capacity, not just what’s shown on paper.

In this article, the Tampa, FL, child custody lawyers at Westchase Law, P.A., will discuss a case involving a disputed child support figure and how pass-through business income should be considered when determining child support payments.

Background of the case 

In the case we’re about to discuss, the final judgment on paternity was issued, along with an award for child support by the trial court. The calculation of child support was opposed by the father, who claimed that the determination of his income by the trial court was incorrect.

The controversy involved earnings from the father’s business activities, specifically pass-through income. Pass-through income is often associated with an S-corporation, partnership, or LLC. It is income that is often subject to being “passed through” for tax purposes. The owner of such an income-generating business is often responsible for declaring such income on their tax return, despite such income being kept in the business.

This is because child support in Florida is based on the parent’s monthly income after taxes. Therefore, how business income is calculated for child support purposes can have a major impact on that overall child support amount.

The appeal

In this case, the father appealed the child support decision, arguing that the trial court included all pass-through income when determining his gross income, instead of basing his gross income on the amount that was actually received to pay support.

On appeal, the Sixth District Court of Appeal considered whether the findings made by the trial court regarding income were supported by the record and whether the child support award conformed to Florida law regarding income.

The appellate court agreed with the father’s position. It held that the method used by the trial court essentially overstated the father’s income since it counted pass-through income that was not necessarily available to him. In other words, the child support was based on an inflated income that was not necessarily cash flow.

As such, it reversed the award of child support, remanding the case to the trial court to recalculate based on the proper income analysis.

Talk to a Tampa, FL, Child Custody Lawyer Today

Westchase Law, P.A., represents the interests of Tampa residents who need to go to court for child custody or child support. Call our Tampa family lawyers today to schedule an appointment, and we can begin discussing your next steps right away.

Source:

law.justia.com/cases/florida/sixth-district-court-of-appeal/2025/6d23-0839.html