Hiring a lawyer for legal support during tax disputes or other legal challenges can be expensive. In view of this, people often wonder: “Are legal fees tax deductible in Quebec?”.
In this guide, our administrative lawyers explain which legal fees are tax-deductible, and which ones are not.
Quebec’s legal and tax environment
Quebec’s tax system is structured around several types of taxes, ranging from personal income tax to Quebec Sales Tax (QST). Each type of tax has its own rules, rates and deductions.
Legal fees are what are sometimes referred to as a “gold coin” within the tax system, a potentially tax-deductible expense that many taxpayers either do not know about or do not understand.
To make sure you take full advantage of the benefits offered by the government, find out which legal fees you can deduct on your tax return.
Which legal fees are tax-deductible in Quebec?
In Quebec, not all legal fees are automatically tax-deductible. However, certain specific situations do allow taxpayers to deduct legal fees from their taxable income.
Alimony and child support expenses
If you have incurred legal fees to determine your right to receive or pay child support, these fees are deductible. This also includes costs incurred to collect or review child support payments.
Note that costs incurred to obtain a divorce or separation are not deductible.
Retirement pension costs
Legal fees paid to recover a retirement pension or to establish your entitlement to this type of allowance may be deducted. However, the deduction is generally only applied to the amount of the allowance for which the costs were incurred.
Fees for opposing or contesting a notice of assessment
If you have incurred legal fees to prepare, present or pursue an objection or dispute to a notice of assessment from the Agence du revenu du Québec or the Canada Revenue Agency, these fees are deductible.
Employment-related expenses
Legal fees paid to collect wages or salaries owed by an employer may be deductible. This includes situations where you have incurred costs to determine your entitlement to unpaid wages or salaries.
Are legal fees related to disputes with the SAAQ, CNESST and IVAC tax deductible?
The SAAQ (Société de l’assurance automobile du Québec), the CNESST (Commission des normes, de l’équité, de la santé et de la sécurité du travail), and the IVAC (Indemnisation des victimes d’actes criminels) are Quebec organizations that provide compensation or benefits to victims of car accidents, work accidents or crime.
Here’s what you need to know about tax-deductible legal fees in these situations.
Legal fees for disputes with SAAQ, CNESST, IVAC
In general, legal fees related to contesting a decision or obtaining compensation from one of these organizations are not deductible as personal expenses. However, if the challenge is related to the receipt of income (for example, an income replacement indemnity), a tax deduction may be possible. Each situation is unique and must be assessed individually by the right lawyer.
Navigate safely through the legal system with the help of our victim lawyers
At Bégin Avocat Montreal-based law firm, we’re here to guide you and answer your questions about the legal sector in Quebec. Our dedicated team is passionate about defending your rights and safeguarding your interests.
If you need help to defend your rights and win your case, look no further. Contact Bégin Avocat today and find out how we can help
