Every year, many Canadians move their primary residences for a new job, start a business, or full-time post-secondary education. Relocation for many individuals can cause a lot of stress, unforeseen changes, and unexpected expenses.
The Canada Revenue Agency (CRA) states that you can claim certain moving expenses on taxes if you satisfy a few conditions. There are some criteria for eligibility and types of costs that can be deducted. If you are a deemed or factual Canadian resident who is required to relocate at least 40 kilometers from the place of original residence to another place where you will ordinarily reside to start a new job or to run a business at a new location, you are entitled to claim your moving expenses. According to the Income Tax Act (ITA), you are required to move at least 40 km closer to your new place of employment, even if you are moving within the same province or transferring over to another location with the same company. This act will cover individuals who moved within Canada, from Canada to another job site outside of Canada, from outside of Canada to a new job location in Canada.
Whether you are a homeowner or a tenant, the claims for the moving expenses tax deductibles are identical as long as you meet the requirement above for eligible relocation. It means that you can write off moving expenses on your personal tax return.
The CRA requires you to fill out line 21900 – Moving Expenses and T1-M Moving Expenses Deduction form. Usually, you are not required to keep a record of all your expenses and receipts. However, the CRA holds the right to request documentation for these types of expenses. That is the reason why it is better to keep your records on file if the Canada Revenue Agency ( CRA ) makes such a request.
*Note: Before-tax year 2019, line 21900 was line 219.
What moving expenses can I claim on my taxes in Canada?
If you qualify to deduct moving expenses either as an employed, self-employed individual or full-time student, you can claim fair amounts of what you paid for moving yourself, family, or household items. There is no need for all parties of your family to travel together or at the same time.
Eligible moving expenses include:
- Transportation and storage costs (packing, hauling, insurance, hauling, movers and in-transit storage
- Travel expenses that include accommodation, vehicle expenses, substantial amounts of meals that you paid during the moving process for both you and your family
- Cost of canceling a lease for your old place of residence (if applicable)
- Cost to maintain your old house such as property taxes, utilities, and heating (up to $5,000, interest, insurance premiums after you moved and while you make reasonable efforts to sell the house)
- Cost of selling your old house including notary and legal fees, advertising, real estate commission, and mortgage penalty when the mortgage paid off before maturity
- Cost of purchasing a new home if you or your spouse or common-law partner sold your old home because of your move
- Incidental costs for changing your name on legal documents, replacing your driver license, disconnecting and connecting utilities
If you had to live somewhere else due to selling your house before your relocation or waiting for a new place to be ready after your move, you could also claim temporary living expenses for up to 15 days. It will include accommodation and meals for you and your family.
Also, note that if your employer compensates some of your moving costs, these costs should be included when you claim your moving expenses tax deductibles.
Pro-Tip 1: It would be best to claim your moving deductibles from new employment or self-employment income when you start at a new location.
Pro-Tip 2: You will be able to claim personal vehicle and meal expenses without receipts. If you lived in Ontario and drove a car to a new location, you can deduct 57 cents per km of your move. The cost per kilometre will vary from province to province. For instance, the price per km in Alberta is 48.5 cents, and for Yukon is 65 cents. Likewise, you will be able to deduct $51 per day for your meals, as well as for each family member with a maximum of 15 days. The Canadian Revenue Agency usually posts updates for travel expenses and meals every year. If you wish to receive the most up-to-date rates, you can contact FSHAD CPA Professional Corporation.
Pro-Tip 3: If several moves occurred in the same taxation year, you could also qualify for moving expenses if you move back to the original location and employer. Each movement is considered separately.
Pro-Tip 4: If you want to benefit from a full deduction on your income tax return, always deduct your selling expenses of the residence as moving expenses. Instead of adding it to the cost of the home for capital gains purposes, keep in mind that it will be the best way to benefit from a tax return.
Pro-Tip 5: The list of expenses listed above is not limited. FSHAD CPA Professional Corporation can assist in case you have other costs that may qualify as moving expenses.
Pro-Tip 6: Some costs are considered not eligible to be claimed by the CRA.
- Renovation costs associated with the previous residence
- Losses on the sale of the last residence
- Charges related to job or house-hunting (trips to a new city or province to look for accommodation)
- Mail-forwarding expenses
- Mortgage default insurance
FSHAD CPA Professional Corporation can assist you in preparing your Canadian return and claim all the expenses you are entitled to. Do not hesitate to contact us for more professional tax tips or consultations.
Can you write off moving expenses for a new job?
If you qualify as an individual who moved and established a new home to be employed, or as self-employed to run a business at a new location, you can be eligible to deduct moving expenses from the new employment or self-employment income at a new location if you meet the 40 km requirement.
What moving expenses can I claim on my taxes in Canada?
Please be advised that the list above has most of the eligible claims on expenses when moving for new employment.
When can you claim moving expenses CRA?
Please contact your financial advisor on when you can claim your expenses.
How much can I deduct for moving expenses?
It depends on the province and varies from case to case. Please contact FSHAD CPA Professional Corporation to know how much you can deduct for your moving expenses.
This publication is produced by FShad CPA Professional Corporation as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors. Your use of this document is at your own risk.