![]() Under the general rules, and in accordance with paragraph 18(1)(a) of the Income Tax Act, no deduction can be made unless the expenses are incurred for the purpose of gaining or producing income from a business or property. We must therefore turn to the general tax rules, which are summarized by the Canada Revenue Agency in its Income Tax Folio S1-F3-C3. ![]() FederalĪt the federal level, there is no specific legal provision allowing for the deduction of legal and accounting fees with respect to support payments. As a result, the deduction is allowed for legal fees with respect to either spousal or child support, even though child supports are non-taxable for the recipient and non-deductible for the payer. QuebecĪt the provincial level, section 336.0.5 of the Taxation Act provides that a taxpayer (either the recipient and the payer ) may deduct, in computing his or her income for a taxation year, judicial (e.g., stamps to institute proceedings, bailiffs fees, and stenographers fees) and extrajudicial (i.e., counsel fees) expenses incurred in the determination or review or collection of a support amount under a court order.įor Quebec tax purposes, the term “support amount” means an amount payable as an allowance on a periodic basis for the maintenance of a recipient who is the spouse or former spouse, father, or mother of a child of the payer, a child of the recipient or both of them. Given the complexity of tax laws, we found it useful to provide an overview of the provincial and federal rules relating to the deductibility of legal and/or accounting costs related to support payments. ![]() If a client retained a lawyer and/or an accountant in the past year to establish, apply for, vary, or collect late child or spousal support payments, they may be entitled to claim a tax deduction with respect to the legal and/or accounting fees that were paid. This article was originally published on Law360™ Canada (part of LexisNexis Canada Inc. Family Law ALLOWABLE TAX DEDUCTIONS FOR LEGAL OR ACCOUNTING FEES PAID TO DETERMINE, MODIFY OR COLLECT SUPPORT PAYMENTS ![]()
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