Are Legal Fees A Tax Deduction: What You Need to Know Before Filing Taxes

Jan 13, 2026

If you’re asking, “Are legal fees a tax deduction?” you’re not the only one. As many Canadians work with lawyers mostly during major life changes, like a divorce or when settling a loved one’s estate, they do not know about tax deductions on legal fees.

Here’s the key idea: in Canada, legal fees are usually not deductible when they are personal (like getting divorced). However, some legal fees can be deductible when they relate to earning or collecting income, and certain family law situations can fall into that category.

At Kelly Jordan Family Law, we provide services that go beyond divorce, including wills and estates. We often get questions about tax deductions for our legal fees.

This blog post breaks down what’s possible, what’s not, and how it commonly works in practice when you are separating or divorcing. You’ll be prepared for tax season with the insights you need for tax deductions.

Are Legal Fees a Tax Deduction in Canada?

In most cases, legal fees are not a general tax deduction. The CRA typically allows deductions when the expense is tied to earning income or collecting amounts that are treated as income.

That’s why the answer to whether lawyer fees are tax deductible depends less on the fact that you hired a lawyer and more on what the lawyer was helping you do.

Common examples where legal fees may be deductible

Collecting or enforcing spousal support (in situations where it is taxable to the recipient under the tax rules)
Collecting overdue support that should be included in income (depending on how the payments are structured and taxed)
Certain employment, pension, or tax dispute situations (outside family law)

Common examples where legal fees are usually not deductible

Getting a divorce or legal separation
Parenting time, decision-making responsibility, custody, and access issues
Property division (equalization), including disputes about the matrimonial home
Most will -drafting and estate planning for personal reasons

Are Legal Fees Tax-Deductible in Ontario?

People often ask, “Are legal fees tax-deductible in Ontario?” The short answer is that the rules are primarily federal income tax rules, so Ontario taxpayers generally follow the same CRA framework as everyone else in Canada.

What can differ is the family law process (court forms, timelines, local practices, whether you are in Toronto or elsewhere), but the tax question itself is usually decided by federal tax law and CRA reporting lines.

Legal Fee Tax Deductions When You’re Divorcing

If you are divorcing, it helps to separate your legal work into buckets because the tax treatment often depends on the bucket.

Bucket 1: Divorce, parenting, and property issues

Most of the time, the following legal work is treated as personal, meaning that it is not deductible.

Obtain a divorce
Negotiate or litigate parenting arrangements
Divide property and debts

So, even if you worked with a divorce lawyer in Toronto for months, the legal fees for the divorce itself will generally not reduce your taxes.

Bucket 2: Support issues (where deductions sometimes appear)

This is where things can get more nuanced. In some situations, legal fees paid by the recipient of support may be deductible when the fees are directly connected to:

Collecting overdue support
Enforcing a support order or agreement
Establishing or revising the amount of support (depending on the facts and how the support is treated under tax rules)

A practical takeaway: the recipient is more likely to qualify for a deduction than the payer, because the recipient is the one who may be required to include certain support amounts in income.

What About Child Support?

Most routine child support is not taxable to the recipient and not deductible to the payer under modern Canadian rules. That often limits the situations where child support-related legal fees create a deduction.

Still, support files can be complicated, especially when orders change, arrears build up, or there are mixed support claims. If your matter includes both deductible and non-deductible issues, it is worth speaking with a tax professional about whether any portion of the fees can reasonably be separated.

What are the Limitations for Tax Deductions in Canada for Divorces?

Even when a deduction may be available, there are common limitations that catch people off guard:

The Deduction is for Specific Work, Not the Whole File

If your lawyer’s work covered divorce, parenting, property, and support all at once, you may need a way to identify the portion connected to the potentially deductible support-related work.

You often need your invoice(s) to be clear enough to support the claim if the CRA asks questions later.

Reimbursements and Cost Awards Can Reduce What You Claim

If you receive reimbursement for legal fees or the court awards costs that cover some of your legal bill, that can affect how much you can claim.

Timing Matters

Deductions are typically claimed for amounts paid in the tax year. If your file spans multiple years, your payments (and invoices) should be tracked year by year.

Not Every “Support discussion” Creates a Deduction

Support discussions during mediation or settlement negotiations do not automatically mean deductible fees. The key question is whether the fees were directly tied to the kind of support-related claim that qualifies under the tax framework.

Other Times Legal Fees May Be Deductible in Family Law and Wills & Estates

Kelly Jordan Family Law supports clients through a range of family-related legal issues. Here are situations where tax questions commonly come up, even if the answer is sometimes “no deduction.”

Support Enforcement and Support Arrears

If you are owed support and need legal steps to enforce payment, this is one of the more common family law situations where a deduction may be possible. Again, this is depending on how the support is treated under tax rules and who is paying the fees.

Support Variation When Circumstances Change

Job loss, disability, parenting schedule changes, and cost-of-living pressures can all trigger a support variation. The tax treatment of related legal fees depends on the nature of the support and the purpose of the legal work.

Separation Agreements that Include Support Terms

Drafting or negotiating a separation agreement often includes multiple topics. Even if support is included, the family-law portion of the work is not automatically deductible in full. It may come down to whether a deductible portion can be identified and supported.

Wills and Estates

Most personal will drafting and estate planning costs are generally viewed as personal expenses, so they are usually not deductible on your personal return.

Where tax issues may arise is during estate administration or when there are trusts or income-producing assets involved. Those situations can get technical quickly, so it’s smart to involve an accountant or tax lawyer to confirm what is available and to whom (the estate, the trust, or an individual beneficiary).

Practical tips before you file

Keep every invoice and proof of payment. CRA questions are much easier to answer with clean records.
Do not assume your entire legal bill is deductible. Most files include non-deductible work.
Ask about clarity in billing. If your matter includes support-related steps, clear descriptions help.
Work with a tax professional. A short review can prevent an expensive mistake.
When in doubt, be conservative. Overclaiming can create CRA reassessments, interest, and stress.

Are Legal Fees a Tax Deduction? What to Do Next

If you’re separating, negotiating support, or dealing with enforcement issues, it is worth getting legal advice early. This is so you understand your options and the likely total cost. A divorce lawyer in Toronto can also help you spot issues that affect not only your agreement, but your longer-term financial picture.

For tax questions, the safest approach is to pair legal advice with accounting advice. Your lawyer can help you understand what the legal work relates to, and your tax professional can help you claim only what the CRA framework supports.

When you need legal advice and support from a family law lawyer, the team at Kelly Jordan Family Law is here for you.

Contact us online or call our Toronto offices at 416-849-5501 to schedule a consultation, so that we can provide the guidance and representation you need.