Are Surrogacy Expenses Tax Deductible?

With costs including fertility treatments, agency fees, legal agreements, and reimbursement for the surrogate, it’s natural to wonder whether any of these expenses are tax-deductible in Canada.

Legal Fees

Legal fees incurred for drafting surrogacy agreements, court applications, or parental declarations are not considered eligible expenses for tax deductions or credits. This stands in contrast to adoption, where certain legal fees may be claimed.

Health-Related Costs

Intended parents may be able to claim a portion of medical expenses if they undergo fertility treatments such as in vitro fertilization (IVF). However, the eligibility depends on specific circumstances, and not all procedures will qualify. Be sure to ask your accountant about the Medical Expense Tax Credit, which was expanded in 2022. Have all of the receipts from the fertility clinic easily accessible and organized. If you paid for a surrogate or donor's medical expenses, keep those receipts and share them with your accountant as well. You may need your donor or surrogate's name and social insurance number. For anonymous donations this could present an issue, but it may only arise in the event of an audit if a receipt is requested.

Costs incurred outside Canada are likely not eligible.

Costs that have been reimbursed or paid for by a provincial program are also not eligible.

Reimbursements to Donors and Surrogates

Reimbursements paid to donors and surrogates are not eligible as a medical expense. Neither are payments to surrogacy agencies, donor banks and donor agencies, although this may change in the future.

Tax Benefits for Surrogates

Surrogates themselves do not receive a taxable income for reimbursed expenses related to the surrogacy journey. Under Canada’s Assisted Human Reproduction Act surrogates can only be reimbursed for actual expenses incurred, such as medical costs, travel, and maternity clothing. These reimbursements are not considered income and therefore are not taxable.