An intricate component in child support cases is the calculation of the parties' income for purposes of determining child support. In the recent case of Hall v. Bartron, __ A.3d __, 2024 Pa. Super. 172 (August 8, 2024), the Pennsylvania Superior Court addressed a number of issues related to the calculation of income for purposes of child support. In the Hall case, the father is a business owner of a closely held corporation. The mother claimed, among other things, that the father shielded some of his income by reinvesting the profits of his company back into the company. The court only included the father's salary that he received from the business in his income available for support and not profits that were retained by the business and reinvested by the business. The mother raised numerous issues on appeal, and the Superior Court addressed this as one of the issues.

As reflected in the support statute, "income" includes "income derived from business;" "gains derived from dealings and property;" "rents;" "dividends;" and "distributive share of partnership gross income." In arriving at "net income" the court shall deduct specific items from the monthly gross income such as federal, state, and local income taxes, F.I.C.A. payments and nonvoluntary retirement payments. As reflected in the Hall opinion: "the Supreme Court has adopted the reasoning that an obligor's income 'must reflect the actual available financial resources and not the oft-time fictional financial picture' created by the application of federal tax laws." In other words, the cash flow is to be considered and not necessarily taxed income. In citing a prior ruling, the Superior Court stated: "the owner of a closely-held corporation cannot avoid a support obligation by sheltering income that should be available for support by manipulating salary, perquisites, corporate expenditures or corporate distribution amounts." The Superior Court then reminded: "if the individual can demonstrate that the retention of corporate earnings is 'necessary for the continued operation and smooth running of the business,' then the court shall not include these earnings when calculating the individual's income available for support."