Filing Your Return -> Line 219 Moving Expenses Deduction
Income Tax Act s. 62, 248(1)
Line 21900 Moving Expenses Deduction
Note: Before tax year 2019, line 21900 was line 219.
See also federal 2022 budget proposal for Labour Mobility Deduction for Tradespeople.
If you moved at least 40km to be closer to a new job, to run a business, or to attend a post-secondary educational institute full time, 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.
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.
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 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.
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:
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.
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.
For more information see Moving Expenses and Relocation Benefits on the Canada Revenue Agency (CRA) website.
Canada Revenue Agency (CRA) ResourcesLine 21900 - Moving expenses
Form T1-M moving expenses deduction (to be filed with the tax return)
Revised: April 07, 2022
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