Who can claim moving expenses on their return?
Students, employees and self-employed individuals can claim certain moving expenses if they move for education or employment purposes. Generally, you can claim moving expenses you paid in the year if both of the following apply:
- You moved to work or to run a business, or you moved to study courses as a full-time student enrolled in a post-secondary program.
- You moved at least 40 kilometres closer to your new work or school.
What are the conditions for students to claim moving expenses?
Full-time students who take post-secondary courses at a university, college or other educational institution can claim moving expenses 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 also deduct moving expenses.
Students must have taxable income from awards (scholarships, fellowships, bursaries, certain prizes or research grants) or employment income at the location they have moved to in order to make the moving expense claim. Students can only deduct moving expenses from the taxable portion of the awards or the employment income earned at the new location.
Under what conditions can employees and self-employed people claim moving expenses?
- Employees can claim moving expenses if they have moved to be employed with a new company or have taken a transfer with their current employer.
- Self-Employed persons can claim moving expenses if they have moved to run a business at a new location. you can deduct eligible moving expenses from the employment or self-employment income you earned at your new location.
- You can only deduct moving expenses against the net income earned at the new location. This means you may have to do a separate calculation to determine how much you can claim. For example:
- As an employee you are transferred to a new location with the same employer, if your entire income from the year is reported on one T4 slip, you’ll need to determine how much of that income was earned after you moved to the new location.
- If you own a business and relocate your business to be closer to a possible market or resources, you’ll need to determine the net self-employment 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.
- Moving expenses are claimed by completing the T1-M Moving Expense Form and claimed on Line 21900 – 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 moving expenses for which you have been reimbursed by your employer. In addition, you cannot deduct these costs:
- Costs for house or job-hunting trips before the move was made,
- 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.
References and Resources
- Canada Revenue Agency: Can You Claim Moving Expenses?
- Canada Revenue Agency: T1M – Moving Expenses Form
- Canada Revenue Agency: Income Tax Folio – Moving Expenses
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