Can You Deduct Legal Fees After Separation or Divorce in Ontario? Here's What the CRA Allows

Separation and divorce can come with significant legal expenses, especially when support issues are involved. Many clients ask whether they can claim their legal fees as a tax deduction. The answer depends on the nature of the legal services and whether you're the support recipient or payor. The rules are clear—and in some cases, surprisingly favourable.

At Van Delft Law, we work with individuals throughout Ontario to ensure that support recipients understand their rights and get the maximum tax benefit possible during and after separation.

Can Legal Fees Be Claimed on Your Taxes in Ontario?

Yes, but only in limited circumstances. Under the Income Tax Act, the CRA allows the recipient of spousal or child support to deduct certain legal fees on their annual tax return. This applies only to fees related to establishing, increasing, or enforcing a right to receive support payments.

If you are the payor—the one making the support payments—you generally cannot deduct legal fees. The CRA views these expenses as personal in nature and not incurred for the purpose of producing income. This distinction is important and often misunderstood.

Eligible Legal Fees for Support Recipients

As a support recipient, you may deduct legal fees you paid to:

• Obtain child support or spousal support from a current or former spouse or common-law partner

• Increase the amount of support

• Collect overdue support payments

• Defend against a former spouse or partner trying to reduce support payments

These expenses may be deducted on Line 22100 of your T1 tax return. The CRA considers these legal fees to be directly related to gaining or enforcing a source of income.

Even if you are not successful in your claim—for example, if the court does not increase your support payments—you can still claim the legal fees you incurred in pursuing the issue.

Legal Fees That Are Not Deductible

The CRA does not allow you to deduct legal fees related to:

• Obtaining a divorce or separation

• Negotiating custody or access to children

• Property division or equalization

• Getting a restraining order or exclusive possession of the matrimonial home

These legal services, while often necessary, are considered personal and therefore not deductible under Canadian tax law.

If you received a lump-sum payment that includes arrears for previously unpaid periodic support, you may also be able to deduct the legal fees related to obtaining that payment, provided certain conditions are met.

Documentation Is Key

To successfully claim a deduction, it is essential that your lawyer provides a clear invoice or letter itemizing which portion of your legal fees relates to support issues. At Van Delft Law, we can provide a detailed breakdown of deductible versus non-deductible legal fees to support your claim.

This documentation becomes especially important if the CRA asks for evidence or supporting documents, which it often does. Legal fees not clearly connected to support issues may be denied, and your deduction could be reassessed.

What About Shared Parenting and Set-Off Support?

In cases of shared parenting, where both parents have obligations to pay child support under section 9 of the Federal Child Support Guidelines, there may be an argument that both parties are “recipients” as well as “payors.” In theory, this could allow both parties to deduct legal fees related to determining support amounts. However, as of now, there are no reported cases confirming this practice.

If your parenting arrangement is complex or involves shared custody, we recommend getting legal advice to assess your entitlement to claim legal fees.

Avoiding Surprises at Tax Time

Many payors are surprised—and often frustrated—to learn that their legal fees are not tax deductible, even though the recipient’s fees are. This difference can affect how negotiations are approached, particularly when calculating the total financial impact of a support agreement.

Understanding your tax obligations from the beginning can help you plan more effectively and avoid unpleasant surprises when it’s time to file your return.

Van Delft Law Helps Clients Maximize Support and Tax Deductions

If you're separated or divorced and receiving support, Van Delft Law can guide you through your options and help you ensure your legal fees are structured and documented in a way that supports your tax return. For clients across Ontario, we provide compassionate, strategic support tailored to each family's needs.

To learn more about spousal support, legal fee deductions, or how to structure your settlement to protect your financial future, contact Van Delft Law today to schedule a consultation.