What Can You Claim in Canada?

When filing your personal tax return (T1), many taxpayers overlook Line 23200 – Other Deductions. This line can significantly reduce your taxable income if used correctly.

At Toro Accounting, we often see missed deductions on this line — especially legal fees and special income-related adjustments.

Let’s break it down clearly.

🔹 What Is Line 23200?

Line 23200 allows you to deduct certain expenses that do not fit elsewhere on the tax return but are specifically permitted by the Canada Revenue Agency (CRA).

These deductions reduce your net income, which can:

✔ Lower your taxes payable
✔ Increase income-tested benefits
✔ Reduce potential clawbacks (like OAS)

Official CRA reference:
👉  Line 23200 – Other deductions - Canada.ca 

1️⃣ Legal Fees You Can Deduct

Not all legal fees are deductible. The key question is:

👉 Were the fees incurred to earn or enforce taxable income?

You may deduct legal fees paid to:

✔ Collect or establish rights to income

• Unpaid salary or wages
• Severance pay
• Pension income
• Employment income disputes

✔ Establish or enforce child or spousal support payments (if taxable)

• Legal fees to obtain or increase taxable spousal support
• Fees related to collecting overdue support

✔ Employment-related disputes

• Wrongful dismissal cases
• Human rights complaints related to employment

🚫 Legal Fees You CANNOT Deduct

❌ Divorce legal fees (except related to collecting taxable support)
❌ Child custody disputes
❌ Purchasing property
❌ Criminal defence fees (unless related to earning business income in limited cases)
❌ Writing or updating a will

2️⃣ Salary Repayments

If you had to repay employment income that was included in a prior year:

✔ Wage overpayments
✔ Bonus repayments
✔ CERB or government benefit repayments (in certain cases)

These amounts may qualify under Line 23200.

3️⃣ Pension & Benefit Repayments

You may deduct:

✔ Old Age Security (OAS) repayments
✔ Employment Insurance (EI) benefit repayments
✔ CPP/QPP benefit repayments

These help prevent double taxation.

4️⃣ Clergy Residence Deduction

Members of the clergy who qualify can deduct the clergy residence amount under this line.

5️⃣ Other Special Situations

Line 23200 may also include:

✔ Repayment of retiring allowances
✔ Certain amounts repaid under income stabilization programs
✔ Income previously reported but later adjusted

Each case must meet CRA criteria.

Why Line 23200 Is Important

Because it reduces net income, it can impact:

• Canada Child Benefit (CCB)
• GST/HST Credit
• Old Age Security (OAS) clawback
• Ontario Trillium Benefit
• Other income-tested programs

A properly claimed deduction can create savings beyond just tax payable.

 Common Mistakes We See

❌ Claiming personal legal fees incorrectly
❌ Forgetting to deduct taxable spousal support legal fees
❌ Not reporting repayments properly
❌ Missing documentation

Proper support and classification are critical in case of a CRA review.

💼 How Toro Accounting Can Help

At Toro Accounting, we:

✔ Review your legal expenses for eligibility
✔ Ensure proper classification on Line 23200
✔ Optimize net income for benefit purposes
✔ Help you avoid CRA reassessments

Strategic tax filing isn’t just about credits — it’s about understanding every line of your T1.

📞 Need Help With Your T1?

If you paid legal fees or repaid income this year and aren’t sure how to report it:

👉 Book your personal tax appointment here