If a beneficiary receives an indemnity for expenses or other reimbursement for some or all of his deductible attorneys` fees, he must reduce the claimed deduction of that amount. If they receive the premium or refund in a subsequent year, this amount must be included in the beneficiary`s income for that year. Your legal expenses related to the collection or confirmation of entitlement to a pension or retirement benefit are deductible up to a certain annual limit. Currently, this limit is the amount of the pension supplement or pension income received during the year minus a portion of those amounts transferred to a registered pension or pension plan. Legal fees that you do not claim in the current year can be claimed for up to seven years. Certain attorneys` fees incurred in connection with child support claims or spousal support payments are tax deductible. If you practice family law in Canada, you owe clients who apply for such relief an obligation to help them obtain this deduction. In my opinion, all clients who have such claims deserve a letter from their lawyer, which can be submitted to the Canada Revenue Agency in support of the deduction. Under the « Other Deductions » section of line 232 of the General T1 Form, support recipients can also claim a tax deduction for attorneys` fees incurred in an attempt to make child support payments tax-free. Expenses paid by the payer to defend against a support obligation or to reduce the amount of support are not deductible. These are not costs to assert an existing right to income and are considered personal expenses. The law allows expenses paid to receive family allowances to be tax deductible, even if the child support itself is not taxable under applicable law.

This is not a typical scenario under the Income Tax Act. The exception is that child support is not included in the technical definition of « exempt » income. With regard to spousal support, if the assistance is taxable, the related expenses are deductible. The attorneys` fees you have incurred in the event of an appeal or appeal against a rating or decision of the credit rating agency in accordance with the following points are also deductible: so keep your detailed invoices and receipts to determine that the attorneys` fees you paid were used to determine, increase (or prevent a reduction of) or to collect assistance. We provide an annual letter of claim on legal fees attributable to these deductible subjects at no additional cost. Income tax legislation regarding whether or not legal and accounting fees can be deducted in the context of divorce and separation is somewhat confusing. The quick answer is that, subject to very specific rules, a person who is entitled to taxable assistance may deduct the legal and accounting costs of obtaining, increasing or defending the receipt of that assistance, including the cost of recovering arrears. A paying child support cannot deduct any expenses.

To find out if your legal fees can be deducted, contact the Family Law Group. Obviously, professionals need to tell their clients which portion of their fees relates to child or spousal support services. If this is not clearly stated in the statement, you should contact your lawyer or financial advisor and receive this breakdown in writing. This deduction is often reviewed by the Canada Revenue Agency, so be prepared to keep your documents ready. The rules for deducting lawyers` fees incurred when an employee claims amounts from an employer or former employer are relatively simple. Unfortunately, the same is not true of the rules on the deductibility of lawyers` fees paid in the context of family support obligations. These rules have developed somewhat fragmentarily in recent years. The current rules are as follows. On the other hand, if the lawyer and the financial professionals agree each year during the negotiations, the fees would be deductible from year to year. The problem in this situation is whether the fees lead to a successful request for help. Often, you are not sure if you will receive support until the negotiations are concluded. If received, expenses are only deductible if the support itself meets the official definition of support.

For example, spousal support is taxable to the payer and deductible to the beneficiary; is a dependent child allowance, which is regularly paid for the maintenance of the child. Depending on the result, it may be necessary to amend the previous year`s tax returns. If the expenses are deductible but have not been claimed before in the year they were charged, you must request a change to the return at the beginning of the year. .