In a new interview with SiriusXM's EW Radio, Margulies said her decision was based on championing for equal pay in Hollywood.
After the public assumed she turned down the offer to reprise her character, Alicia Florick, the three-time Emmy-winner is making it clear that CBS was "twisting it that I didn't want to be on the show."
She did, however, make it clear she would agree to appear on The Good Fight under one condition.
"If they were to ask me to go back on The Good Fight, paying me what my salary is, of course [I would], in a heartbeat. But you have to value your worth."
Margulies was initially excited when The Good Wife and The Good Fight creators Robert and Michelle King approached her to reprise her character and be reunited with her former co-stars, Christine Baranski and Cush Jumbo.
"I said, 'Oh, my God, sign me up, I'm so excited!'. [It was a] three-episode arc, I get to work with friends, it's great writing, and I miss Alicia."
However, CBS was offering her a salary at the guest star rate, rather than her higher rate on The Good Wife.
She kept the discussion on the down-low when interviewers asked her about revisiting the role of Alicia.
"I thought, why am I protecting CBS? I said yes, they said no. And you know what? I need to pave the way for the next [actress] coming up."
She stated her case for refusing a guest star rate.
"I watch the show, I love the show. But I'm not a guest star. You don't pay me a guest-star salary. I would get a guest-star salary if I went and did SVU — it's not my show."
While she made clear she would not ask to get paid her former rate from when she starred in her own show, she did point out that other male actors would not have been similarly shortchanged.
"I also know for a fact that any male star who got asked to go on a spinoff of their show would have been offered at least $500,000. I know that for a fact."
Moving on to another subject, she talked about the slap in the final moments of the series finale for The Good Wife, which ran a successful seven seasons.
Margulies knew about that jarring scene long before filming began.
"The day I shot that pilot of me slapping Chris Noth, Robert and Michelle King said to me, 'We have seven years in us to write this show if it gets picked up. In the ending, you will be slapped.'"
"They knew the ending when they shot the pilot, and that's their right. I said, 'You guys created the show, you are the visionaries, I will do what you say. My job is just to make it look real.'"
And she continues keeping it real in Hollywood by putting up a good fight for other actresses.