Line 232 - Legal fees

You can claim a deduction for legal fees on line 232 in any of the following situations:

• You paid fees (including any related accounting fees) for advice or assistance in responding to the Canada Revenue Agency (CRA) when your income, deductions, or credits for a year were reviewed or in objecting to or appealing an assessment or decision under the Income Tax Act, Unemployment Insurance Act, Employment Insurance Act, Canada Pension Plan Act , or Quebec Pension Plan.

• You paid fees to collect or establish a right to a retiring allowance or pension benefit. You can claim up to the amount of retiring allowance or pension income you received minus any part of these amounts transferred to a registered retirement savings plan or registered pension plan. You can carry forward, for up to seven years, legal fees that you cannot claim in the year.

• You paid fees to collect (or establish a right to) salary or wages. It is not necessary for you to be successful; however, the amount sought must be for salary or wages owed. You must reduce your claim by any amount awarded to you in respect of those fees, or any reimbursement you received for your legal expenses. (These fees must be deducted on line 229.)

Under proposed legislation you can deduct legal fees you paid to collect or establish a right to collect other amounts, such as wage loss replacement plan benefits, which are included as employment income. (These fees must be deducted on line 229.)

• 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 natural 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 an order.

• Seek to obtain an increase in support payments.

• Seek to make child support non-taxable.

You have to reduce your claim by any award or reimbursements you received for these expenses. If you are awarded the cost of your deductible legal fees in a future year, you will have to include that amount in your income for that year.

For details of other legal fees you may be able to deduct, get IT99R5, Legal and accounting fees.

You cannot claim legal costs you incurred to:

• get a separation or divorce;
• establish custody or visitation arrangements of a child;

Note

If you pay support, you cannot claim legal costs incurred to establish, negotiate, or contest the amount of support payments.

Completing your tax return

On line 232, claim the allowable amount of legal fees.

If you are filing a paper return, do not include your receipts but keep them in case we ask to see them. If you are filing electronically keep all of your documents.

Forms and publications

• General Income Tax and Benefit Guide
• IT99R5, Legal and accounting fees
• Support Payments pamphlet (P102)

Related topics

• Line 229 - Other employment expenses