Claiming Legal Fees on your Income Tax

[Looking4Answers]

Here is a link to claiming your legal costs on your Income Tax Return.

Please note you cannot claim legal fees for a Separation Agreement nor for trying to establish visitation or custody of children.

Basically legal costs can ONLY be claimed for establishing "support payments".

This link will define Revenue Canada's requirements in claiming legal costs on your income tax return.

http://www.cra-arc.gc.ca/E/pub/tg/p102/p102-11e.pdf

If anyone has had experience in claiming legal fees with Revenue Canada your input would be greatly appreciated.

[Teenwolf]

Some more info can be found here: Line 156 and 128 - Support payments received

A recipient can deduct, on line 221 of their income tax and benefit return, legal fees paid to:

- collect late support payments;
- establish the amount of support payments from your current or former spouse or common-law partner;
- establish the amount of support payments from the legal parent of your child (who is not your current or former spouse or common-law partner) where the support is payable under the terms of a court order; or
- try to get an increase in support payments.

A recipient can also deduct, on line 232 of his or her income tax and benefit return, legal fees paid to try to make child support payments non-taxable.

A recipient cannot claim legal fees incurred to:

- get a separation or divorce; or
- establish custody or visitation rights to a child.

Legal fees paid to collect a lump-sump payment which does not qualify as a support payment are not deductible (see Lump sum payments).

[torontonian]

I claimed the legal fees last year (about $5,000 - I miss those good old cheaper times!), I did a hard-copy return, so I just wrote on the line: "Legal fees to establish CS and SS"... had no issues, got a nice refund

[Teenwolf]

Yup, it looks like you can add up all your eligible legal fees for the year and enter the amount on line 221. You also need to complete a schedule 4 (part IV). The amount will be deducted (dollar-for-dollar) from your taxable income.

[torontonian]

Also: my lawyer last year didn't give me a receipt for taxes, she just said to take the total amount and use 1/3 CS, 1/3 property, and 1/3 SS. You can only claim establishing CS and SS for your taxes. My current lawyer provides a document with each amount ( I guess I'll be paying for it )

[Teenwolf]

Originally Posted by torontonian

Also: my lawyer last year didn't give me a receipt for taxes, she just said to take the total amount and use 1/3 CS, 1/3 property, and 1/3 SS. You can only claim establishing CS and SS for your taxes. My current lawyer provides a document with each amount ( I guess I'll be paying for it )

Are you sure? My post above, which was directly from CRA, states that you can claim legal fees paid to:

- collect late support payments; or
- try to get an increase in support payments.

[torontonian]

Sorry - I stand corrected! I should have read your info first...Thanks for fixing my mistake.

[Teenwolf]

No problem. Now, I just need to figure out how to claim it thru Ufile

[Looking4Answers]

Originally Posted by torontonian

I claimed the legal fees last year (about $5,000 - I miss those good old cheaper times!), I did a hard-copy return, so I just wrote on the line: "Legal fees to establish CS and SS"... had no issues, got a nice refund

Torontonian:

Did you have to show the portion of your legal fees that relate to obtaining support payments? If so, how are we as the client able to do that with only the invoices the lawyers submit to us?

[Looking4Answers]

Originally Posted by Teenwolf

Yup, it looks like you can add up all your eligible legal fees for the year and enter the amount on line 221. You also need to complete a schedule 4 (part IV). The amount will be deducted (dollar-for-dollar) from your taxable income.

What is classified as eligible legal fees for the year? The total of all the invoices?