In some cases, legal fees are deductible. For example, legal fees that are paid to pursue child or spousal support are deductible from the recipient spouse’s income.
The Income Tax Act specifically allows that for the purposes of determining taxable income, a person can deduct any legal and accounting fees (which the legislation collectively calls “professional fees”) that are incurred in the pursuit of a claim for child or spousal support. These professional fees must be deducted in the year during which they are paid. In this way, by deducting those... MORE »
Parents who receive child support payments are not required to include those payments in their taxable income. Payor parents are not permitted to deduct these child support payments from their taxable income.
The result of this rule is that parents who receive child support payments are able to spend more of their support payments on their children.
There is an exception to this rule if your child support arrangements were made prior to April 30, 1997. If you have an old agreement that was made before 1997, you can elect to have... MORE »
If you and your spouse have agreed to spousal support payments or have a court order in respect to spousal support, it is important to understand a few things.
Firstly, the spouse paying support is allowed to deduct the amount they pay in spousal support from their income taxes. Secondly, the spouse receiving support is required to add this amount to their total income, as well as pay taxes on the amount received.
However, child support does not fall under these rules, and is never tax deductible.
Finally, if your divorce includes an... MORE »