Deducting Legal Costs For Child And Spousal Support

February 11, 2008

By Brad Smith

In certain circumstances a support recipient may be able to claim a deduction for legal costs incurred to pursue or collect child support or spousal support.

The legal costs you incurred for the following reasons may be tax deductible:

  • Legal costs incurred to obtain spousal support under the Divorce Act.
  • Legal costs incurred to obtain spousal support under the Ontario Family Law Act (or the equivalent in other provinces).
  • Legal costs incurred to obtain child support under the Divorce Act.
  • Legal costs incurred to obtain child support under the Ontario Family Law Act (or the equivalent in other provinces).
  • Legal costs incurred to enforce support.
  • Legal costs incurred to obtain an increase in support.
  • Legal costs incurred to make child support non-taxable under the Child Support Guidelines.
  • Legal costs incurred to defend a request to reduce support.

You may be able to deduct the legal fees that reasonably relate to the support if you are the support recipient. A support payor cannot deduct his or her legal costs. When you hire a lawyer, there may be several other issues in dispute. This includes an equalization payment (in Ontario), division of property or possession of property. The legal costs incurred for these other reasons are not necessarily deductible.

Please go to the following for more information:

Income Tax Technical News, No. 24, October 1, 2002
http://www.cra-arc.gc.ca/E/pub/tp/itnews-24/itnews-24-e.pdf

Interpretation Bulletin IT-99R5 (Consolidated)
http://www.cra-arc.gc.ca/E/pub/tp/it99r5-consolid/it99r5-consolid-e.pdf