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What Are Moving Expenses?

Moving expenses are costs incurred when relocating to start a new job, carry on a business, or attend a post-secondary educational institution full-time. The Canada Revenue Agency (CRA) allows eligible taxpayers to claim these expenses as a deduction to reduce their taxable income.

Who Can Claim Moving Expenses?

You can claim moving expenses if you meet these conditions:

  1. Purpose of the Move:
    • To work at a new job or carry on a business.
    • To attend a post-secondary educational institution as a full-time student.
  2. Distance Test:
    • Your new home must be at least 40 km closer to your new workplace or school compared to your previous home.
  3. Income Requirement:
    • Moving expenses can only be deducted against income earned at your new location (e.g., employment, business, or scholarships).

Eligible Moving Expenses

You can claim the following costs:

  1. Transportation and Storage:
    • Costs of moving belongings, including movers, packing, and storage fees.
  2. Travel Costs:
    • Includes vehicle expenses, fuel, meals, and accommodations for your family during the move.
  3. Temporary Living Expenses:
    • Up to 15 days of meals and accommodations at your new or old location.
  4. Costs of Selling Your Old Home:
    • Includes real estate commissions, advertising, and legal fees.
  5. Costs of Buying a New Home:
    • Legal fees and transfer taxes (e.g., land transfer tax) associated with purchasing your new home.
  6. Utility Connection/Disconnection Fees:
    • Costs of connecting or disconnecting utilities at your old and new homes.
  7. Incidental Costs:
    • Costs such as obtaining new driver’s licenses or vehicle registration.
  8. Lease Cancellation:
    • Penalties for ending the lease on your old home.

Ineligible Expenses

The following are not eligible for deduction:

  • House-hunting trips.
  • Renovation or repair costs to make your old home sellable.
  • Losses incurred on the sale of your home.
  • Mortgage penalties for early repayment.

How to Claim Moving Expenses

  1. Complete Form T1-M:
    • Use Form T1-M: Moving Expenses Deduction to calculate your total deductible moving expenses.
  2. Enter on Your Tax Return:
    • Transfer the amount from Form T1-M to Line 21900 of your income tax return.
  3. Keep Supporting Documents:
    • Retain receipts, contracts, and proof of distance for CRA verification.

Carrying Forward Moving Expenses

  • If your moving expenses exceed your income at the new location for the year, the unused amount can be carried forward to future years.
  • Students can only deduct moving expenses against taxable scholarship income.

Frequently Asked Questions

Q: Can I claim moving expenses if my employer reimbursed part of the costs?
A: You can only claim expenses not reimbursed by your employer.

Q: Are storage fees deductible if I delay moving into my new home?
A: Storage costs are deductible only if they occur as part of the direct moving process.

Q: Can I claim moving expenses for a move within the same city?
A: No, the CRA requires your new home to be at least 40 km closer to your work or school than your old home.

Tips for Maximizing Moving Expense Deductions

  1. Track All Costs: Keep a detailed record of all eligible expenses, including receipts and mileage logs.
  2. Bundle Eligible Expenses: Claim both temporary living expenses and travel costs for the maximum deduction.
  3. Prove Distance: Use tools like Google Maps to verify the 40 km distance requirement when submitting your claim.

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