Moving expenses are tax deductible if you’re moving for employment purposes. Whether it’s a new job for the summer or a location transfer under the same employment, Canadian residents are eligible to claim moving expenses. The requirement is that they must move to a location that is a minimum of 40 kilometres closer to the new business location, according to the Income Tax Act. This could be within the same province/territory or to a different one.
Additionally, claiming is not dependent on your status. You can be a homeowner or a tenant. As long as you meet the requirement of moving to a location that is 40 kilometres or more to the employment location, you can claim moving expenses on your personal tax return.
What Moving Expenses Can I Claim on My Taxes?
Here’s some good news: most moving expenses are eligible for a tax deduction provided that you pay them by December 31st of the year you claim them.
When it comes to vehicle and meal expenses, the Canada Revenue Agency (CRA) provides taxpayers with two ways to claim: by a flat rate or the actual costs. The flat rate for vehicles changes on an annual basis and meal rates are different in each province and territory. If you use the flat rate method (aka the simplified method on the CRA’s website), you won’t need to keep detailed receipts. But bear in mind that you may be asked to provide some documentation to support your claim. Otherwise, you’re required to track all car-related expenses for a year, including gas, maintenance, car loan interest, and insurance.
Be sure to refer to the CRA website each year for the flat rate when you plan on claiming your moving expenses.
Eligible Moving Expenses
From selling to transportation, here is a detailed list of eligible moving expenses you can claim:
- Travel expenses (e.g., automobile expenses)
- Costs of moving belongings (e.g., hiring a moving van and storage)
- Costs for a maximum of 15 days for you and your family (e.g., meals and accommodations on the way to the new home)
- Costs of cancelling your lease on the old residence
- Costs of selling your old residence (e.g., advertising and legal fees)
- Costs of maximum $5,000 for maintaining the old residence once it’s vacant (e.g. mortgage interest and property taxes)
- Legal fees and land transfer fees paid during the purchase of a new home once the old home has been sold as a result of the move
- Fees for utility disconnection and hook-ups
- Miscellaneous costs (e.g., changing your address and purchasing a new driver’s license)
Note: Eligible moving expenses can be deducted only from the employment or self-employment income earned at the new location. If you cannot claim the total amount of your moving expenses in the current year because they will exceed your income at the new location for that same year, the excess will be rolled over to the following year.
Move to Your New Residence with Confidence
We’ve seen it all: domestic moves, cross-border moves, overseas moves. The professionals at Focus Moving Services can answer all your questions about anything to do with moving, from taxes to storage to overseas legal documents. Moving is stressful no matter the distance, but we make it easier, so you can focus on your new job details and family.
Contact us to learn more about what we offer.
