If you moved to be closer to a current or new job, to run a business, or
to attend a post-secondary educational institute full time, and your
relocation is determined to be an eligible relocation, then you may
deduct the cost of moving expenses paid (not just incurred), up to the amount you earn at the new
location, or up
to the amount of award or scholarship income received in the year.
An eligible relocation is one in which the distance between the old
residence and the new work location is at least 40 kms greater than the
distance between the new residence and the new (or current) work location.
It is reasonable to use online maps to determine the distance one has moved.
A recent court case proves it's important to determine that distance using the
time of day that the taxpayer would be travelling to and from work. In De Kruyff v. The King 2025 TCC 116,
the taxpayer succeeded in his appeal by showing that CRA did not use the
appropriate time of day to calculate the "shortest normal route" using
Google Maps.
Does
the Job Have to be With a New or Existing Employer?
The
new job can be with the same employer, or with a new employer. Moving
expenses can be deducted if the taxpayer does not already have a job at the
new location, but subsequently finds one there. See Tax Court of Canada
case Abrahamsen
v. The Queen, 2007 TCC 95.
What is
an Eligible Relocation for Moving Expenses?
Normally, for the relocation to be an "eligible
relocation", both the old and the new residence must be located in
Canada, except in the case of a full-time
student. However, a move between two locations outside of Canada can
also be an "eligible relocation" if:
you are a Canadian resident (either factual or deemed)
living out of the country, and
you moved from the place where you ordinarily resided,
to live in another place where you ordinarily reside.
You
may carry excess expenses forward to be offset from income earned at the new
location in the next year. When both spouses have moved and subsequently
earn income in the new location, the moving costs can be split between the
spouses.
What Moving Expenses Can
be Claimed?
Some expenses such as meals
and vehicle expenses can be claimed using the simplified method (see
link to Line 21900 below), which does not require receipts to be
submitted. However, Canada Revenue Agency (CRA) says "Although you do not need to keep detailed receipts for actual expenses if you choose to use this method,
we may still ask you to provide some documentation to support your claim."
The wording of the Income Tax Act indicates that amounts may be deducted for
moving expenses "paid by the taxpayer as or on account of moving
expenses incurred in respect of an eligible relocation". This
would imply that if no expenses were incurred for meal expenses, for instance,
that there could not be a deduction for them. This is confirmed by the Tax
Court case Skrien v. The Queen 2015 TCC 322.
Many costs are deductible as moving expenses, including:
transportation and storage costs for household effects
travel, including vehicle costs and reasonable costs for
meals and accommodations in the course of moving the taxpayer and members of
the taxpayers household from the old residence to the new residence
costs of cancelling a lease for the old residence
real estate commission, advertising, legal and other costs
re selling the old residence
legal fees re the purchase of a new home, and any tax, fee
or duty (other than GST or value-added tax) imposed on the transfer or
registration of title to the new residence
costs re maintaining the old residence, up to a maximum of
$5,000, while the old residence is either vacant, or not occupied by any
person who ordinarily resided with the taxpayer at the old residence
immediately before the move, and while the old residence is not rented by the
taxpayer to any other person. These costs are deductible as long as
reasonable efforts are made to sell the old residence
change of address costs, such as replacement of drivers'
licenses, non-commercial vehicle permits, and costs of connecting or
disconnecting utilities
Note that if any moving costs have been reimbursed by your employer, then
the moving costs must be reduced by the amount received, unless the reimbursed
amount is included as income elsewhere on your tax return.
Employer-Paid
Moving Expenses and Taxable Benefits
If an employer reimburses an employee for moving expenses re
a transfer to a new work location, certain of these expense reimbursements will
not be considered a taxable benefit to the employee, while some reimbursements
will be considered a taxable benefit. When the employee has an eligible
housing loss, only half of the amount exceeding $15,000 is taxable.
If the benefit to the employee is taxable, then CPP
contributions and income tax must be deducted. If the taxable benefit is
paid in cash, employment insurance (EI) premiums must be deducted.
Non-cash benefits are not subject to EI.
Income Tax Act s. 8(1)(t), 8(14), Income Tax Regulations s. 238(1)
This deduction, a maximum of $4,000 per year, was introduced for 2022 and
later years, for eligible employed tradespersons making eligible temporary
relocations. The amount of $4,000 is not indexed for inflation each year. It
is claimed on the T777
Statement of Employment Expenses along with other employment expenses, and
is deducted on line 22900 of the tax return.
An eligible tradesperson is an employee involved in construction activities.
This includes the erection, excavation, installation, alteration, modification,
repair, improvement, demolition, destruction, dismantling or removal of all or
any part of a building, structure, surface or sub-surface construction, or any
similar property.
Eligible
Temporary Relocation
An eligible temporary relocation must meet the following conditions:
it is undertaken by the taxpayer to enable them to perform their duties of
employment as an eligible tradesperson at one or more temporary work
locations of the taxpayer within the same locality,
prior to the relocation, the taxpayer ordinarily resided at a residence in
Canada (the ordinary residence),
The taxpayer was required by their duties of employment to be away from
the ordinary residence for a period of not less than 36 hours,
during the temporary relocation, the taxpayer temporarily resided at one
or more lodgings in Canada (the temporary lodging), and
the temporary lodging must be at least 150km closer than the taxpayer's
ordinary residence to the temporary work location.
Eligible
Temporary Relocation Expense
An eligible temporary relocation expense is a reasonable expense incurred by
the taxpayer during the taxation year, the previous taxation year or prior to
February 1 of the following taxation year, in respect of
transportation for one round trip per eligible temporary relocation
between the ordinary residence and the temporary lodging,
meals consumed by the taxpayer during the round trip, and
the temporary lodging, if, throughout the period of the taxpayer's
temporary relocation,
the taxpayer maintains their ordinary residence as their principal
place of residence, and
the ordinary residence remains available for the taxpayer's occupancy
and is not rented to any other person
An expense cannot be claimed if:
it is deducted, other than as an eligible temporary relocation expense, in
computing the taxpayer's income for any taxation year,
it was deductible by the taxpayer for the immediately preceding taxation
year, or
the taxpayer is entitled to receive a reimbursement, allowance or any
other for of assistance (other than an amount that is included in computing
the income for any taxation year of the taxpayer and that is not deductible
in computing the income of the taxpayer) in respect of the expense.
Temporary
Relocation Deduction Amount
The deduction for a taxation year is the lesser of:
$4,000,
the total eligible temporary relocation expenses for the taxation year,
and
half of the taxpayer's total income for the taxation year from employment
as an eligible tradesperson at all temporary work locations.
reasonable moving expenses incurred for the purpose of a disabled
patient's move to a dwelling that is more accessible by the patient, or in
which the patient is more mobile or functional, to a maximum of $2,000
($3,429 for Ontario METC for 2024, $3,525 for 2025). See Moving
expenses on CRA website.
transportation service costs, where the taxpayer has to
travel at
least 40 km to the location where the required medical services are
provided, as long as substantially equivalent medical services are not
available in the taxpayers locality. If the taxpayer has been
certified by a medical practitioner to be incapable of travelling without
the assistance of an attendant, then the transportation service costs of
the attendant may also be claimed.
travel at least 80 km one way for medical services:
reasonable travel
expenses (meals, lodging, vehicle expenses including parking) may also be claimed.
The travel costs can be calculated by keeping all
receipts, or by using the CRA meal expense allowance
and vehicle cost per kilometre amounts. See the
CRA web page on travel
expenses for medical expense, which links to information on meal and
vehicle rates used to calculate
travel
expenses for medical travel for each province. The
simplified method meal rate has been $23 per meal since January 1, 2020.
travel
expenses outside of Canada, when a person is required to travel 80
km or more one way from their home to get medical services outside of
Canada, which are eligible medical expenses - the expenses include
transportation, travel, accommodations, meals and parking.