Introduction 

The Court of Appeals clarified that forgiven PPP loans must be treated as income for child support purposes because, once forgiven, the funds function as financial resources available to the parent. 

In Herbert v. Joubert (Record No. 1847-22-4, Va. Ct. App. Feb. 25, 2025), the Court of Appeals of Virginia addressed how forgiven Paycheck Protection Program (PPP) loans - initially issued during the COVID-19 pandemic - should be treated in child support calculations. The Court held that once forgiven, PPP loans qualify as income under Virginia Code § 20-108.2(C) and must be included when determining presumptive child support obligations. The decision clarifies that even nonrecurring or irregular income sources are counted toward gross income for purposes of calculating support. 

Background 

Both parents received and later had PPP loans forgiven, but the circuit court discounted the funds as nonrecurring income when modifying child support.

Courtney Herbert (“Mother”) and Guy Joubert (“Father”) divorced in 2019 and shared two children. Both parents are business owners. Mother runs a dermatology practice, and Father owns part of a litigation support company. During the pandemic, both of them applied for, and received, PPP loans to sustain their businesses. In 2021, Mother received two loans totaling $108,000, and Father received two totaling more than $840,000. All loans were later forgiven by the Small Business Administration. 

When Father moved to modify his 2019 child support order, the Fairfax Circuit Court excluded both parties’ PPP loans from their gross income, reasoning that the loans were a “nonrecurring event” that would unfairly distort the child support calculation. The court based the new support order on the parties’ 2021 earnings, excluding the PPP funds, and held that Father owed no arrearages for unreimbursed medical expenses. Shortly after, Mother appealed the decision. 

Legal Analysis

The Court held that forgiven PPP loans fall squarely within Virginia’s broad definition of gross income, making the circuit court’s exclusion of them an error requiring recalculation of support.

 

The Court of Appeals reversed in part, holding that the circuit court erred by excluding PPP loan proceeds from the parties’ gross income. Under Virginia Code § 20-108.2(C), “gross income” includes all income from all sources, including irregular or one-time payments such as gifts, prizes, and awards, unless specifically excluded by statute. 

The Court reasoned that once forgiven, PPP loans were no longer liabilities; instead, they were funds received and retained by the parties, functionally equivalent to income. Relying on precedent such as Goldhamer v. Cohen (2000) and Cranwell v. Cranwell (2011), the Court reaffirmed that irregular or nonrecurring income must still be included in child support calculations. A parent’s current financial condition, not the predictability of future income, controls. 

The Court also noted that the circuit court had erred in finding no arrearages for unreimbursed medical expenses incurred before December 20, 2019. The record showed that Father paid only 50% of those expenses, even though he was obligated to pay 74.3%. The case was remanded for the trial court to recalculate both child support and the amount of medical arrearages owed. 

As for Mother’s additional claims, including her request for higher attorney fees and additional childcare expenses, the Court found no abuse of discretion. It held that the trial court properly exercised judgment in limiting fees due to insufficient documentation and in determining that eight hours, rather than ten, of weekly childcare were employment-related. 

Implications 

The decision confirms that Virginia courts must include forgiven PPP loans - and all other irregular or one-time income - when determining child support, and that trial courts must base support on current financial circumstances. 

Herbert v. Joubert marks the first published Virginia appellate decision to address how PPP loan forgiveness impacts child support calculations. The opinion reinforces Virginia’s expansive definition of income and highlights the importance of transparency when disclosing business-related or pandemic-era funds in domestic relations cases. The ruling makes clear that:

     1. Forgiven loans qualify as income. Once a PPP loan is forgiven, the funds become available resources for the parent and must be                         included in gross income.

     2. Irregular or one-time income still counts. Courts may not exclude nonrecurring funds merely because they are unlikely to repeat. 

 

3. Trial courts must base child support on current financial conditions, not anticipated future changes. 

Smith Strong Can Help 

Smith Strong advises parents on how business income, forgiven loans, and other financial resources af ect child support obligations under Virginia law.

At Smith Strong, PLC, our attorneys remain up to date on Virginia’s evolving family law standards, including those governing business income, self-employment, and post-pandemic financial relief programs. We assist clients in presenting accurate financial information and ensuring that child support determinations reflect their true financial circumstances. To discuss your case confidentially, contact our Richmond office at (804) 325-1245 or in Williamsburg at (757) 941-4298.