If you are relocating for a new job in Canada some of the expenses you incur in relation to the move are tax deductible. Moving comes with a lot of different kinds of stressors, life changes and it comes with a financial cost. But can you write off moving expenses for a new job? Being a Canadian resident who is required to change their location of residence due to new employment or change in employment location, as well as for business purposes, you may be eligible for moving expenses tax deductibles. To be eligible to claim these expenses tax deductibles the Income Tax Act states that you are required to move at least 40 kilometers closer to your new employment or business location. This could mean a move to a new province or transfer over to another location within the same company. You could also be moving within the same province – the only requirement really is that your move is at least 40 kilometers closer to your new place of employment or business. You can claim the moving expenses tax deductibles whether you are a homeowner or a tenant- the claims are basically the same as long as you meet the requirement, you are eligible to deduct the expenses listed below on your personal tax return.
For your expenses, CRA requires line 21900 – Moving Expenses to be filled out. Please note prior to 2019 this ling was 219. Form T1-M Moving Expenses Deduction must also be filled out. When filing these claims, you are not required to keep a detailed record of all your expenses or receipts but the Canada Revenue Agency (CRA) can still request that you provide documentation for these expenses. It is always in your best interest to keep these records on file.
What moving expenses can I claim on my taxes in Canada?
Tax deductible moving expenses include:
- Reasonable travel costs for you and your household members including airfare, train/bus tickets, vehicle rentals and personal vehicle expenses if you drive yourself (This also includes a boat or recreational trailers).
- The costs of transporting or storing household items.
- The costs of meals and accommodations near the old location or the new location for a period not exceeding 15 days.
- Lease cancellation and selling costs of old residence.
- If you are selling the old residence the cost of legal expenses, transfer taxes and registration taxes in relation to the new residence (excluding HST and other sales taxes which are not deductible).
- Mortgage interest, property taxes, insurance, the cost of heating and utilities for the old residence, up to a maximum of $5,000. During the period in which these expenses are incurred the old residence cannot be rented to a tenant and cannot be occupied by you or your household members. In addition, you should be making reasonable efforts to sell the property during this period.
- The costs to revise legal documents for your new address, replacing driver’s licenses and connecting and disconnecting utilities.
Note that if your employer reimburses you for certain moving costs, those amounts should be factored in when claiming your expenses tax deductibles.
Tax Tip 1: Your reasonable claim should be deducted from the employment or self-employment income earned when at the new location.
Tax Tip 2: You can claim personal vehicle and meal expenses without receipts. If you are in Ontario and you drive your own car to the new location, you can deduct 57 cents per km for the move. Your per kilometer cost depends on the province or territory your travel begins. Costs vary from 48.5 cents for Alberta to Yukon’s 65 cents. You can also deduct $51 per day for meals in the course of moving, for each household member, up to a maximum of 15 days. The CRA updates the standardized meal and travel expenses every year. For the most up to date rates please speak to SRJ Chartered Professional Accountants.
Tax Tip 3: Each move is considered separately. A second move back to your original location and the original employer would also qualify for moving expenses even if it occurred in the same taxation year as the first move.
Tax Tip 4: If you are selling your residence to move to a new job always deduct the selling expenses as moving expenses instead of adding it to the cost of the residence for capital gains purposes. In this way, you will benefit from a full deduction on your income tax return.
Tax Tip 5: The expenses listed above are not exhaustive. Your accountant can advise you if you believe you have other costs that may qualify as moving expenses.
Tax Tip 6: There are certain costs that are not eligible to be claimed by the Canada Revenue Agency (CRA). Some of these limitations are as follows:
- Renovation costs to make the previous residence more saleable.
- Losses on the sale of the previous residence.
- Costs associated with job-hunting and house-hunting (this includes trips to a new city/province to look for residence)
- Mail forwarding expenses
- Mortgage default insurance
- For a more detailed list of what is not claimable please speak to your financial advisor.
SRJ Chartered Professional Accountants, located in Toronto and Mississauga, can help you prepare your Canadian tax return and claim all the expenses you are entitled to. Contact SRJ Chartered Professional Accountants for more tax tips by email at firstname.lastname@example.org or call us at 647-725-2537 for a consultation.
Frequently Asked Questions
Can you write off moving expenses for a new job?
You may be eligible for moving costs depending on whether you meet the 40-kilometre moving requirement.
What moving expenses can I claim on my taxes in Canada?
Please see the list above for eligible claims on expenses when moving for new employment.
When can you claim moving expenses CRA?
Please speak to your financial advisor on when you can claim your expenses.
How much can I deduct for moving expenses?
This varies from province to province and case by case. Please speak to SRJ Chartered Professional Accountants to know how much you can deduct for your expenses.