Moving Tax Deductions in Canada
Who can claim moving expenses on their return?
Students and employees can claim certain expenses related to their move from a location in Canada to another location in Canada.
What are the conditions for students to claim moving expenses?
Full-time students who take postsecondary courses at a university, college or other educational institution can claim those if their new residence is at least 40 km closer to their school. You can deduct those expenses paid at the beginning of each school year, and when you move back after summer break or a work semester.
Co-op students can use student tax deductions to also deduct moving expenses. You must have taxable income from awards (scholarships, fellowships, bursaries, certain prizes or research grants against which to deduce your moving expenses). If you move to a new location to work (including a summer job) or to run a business, you can use moving expenses to reduce the income tax payable on those earnings.
Under what conditions can employees and self-employed people claim moving expenses?
People who move at least 40 km closer to a new workplace or have been relocated by their employer can deduct certain moving expenses against income earned at the new location. The new home must be the place where you and the members of your household normally reside. Employees who work from home and have to provide a home office as a condition of employment may also claim moving expenses.
What expenses are eligible?
Some examples of allowable moving expenses are:
- Transportation and storage for household effects
- Travelling from old to new residence
- Accommodation, meals, & temporary living expenses near new or old residence
- Cost of cancelling the lease for your old rented residence and expenses for selling your old residence
- Expenses related to purchasing new residence
- Address change on legal documents, replacing your driver’s license
- Utility hook-ups and disconnections, etc.
What are the expenses I cannot deduct?
You cannot deduct expenses for which you have been reimbursed by your employer. In addition, you cannot deduct your costs for house or job-hunting trips before you move, the cost of cleaning or repairing a rented residence, mail-forwarding costs, etc.
My moving expenses are more than the net eligible income I earned at the new location or the taxable amount of awards. What can I do?
In the following years, you can carry forward and deduct the unused part of the moving expenses from employment or self-employment income earned at the new location or from the taxable portion of award income.
Can I split my moving expenses with my spouse?
Yes, you can split legitimate moving expenses for a family move with your spouse if that will maximize your deduction or have the spouse with the higher marginal tax rate claim the whole amount.