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Moving Expense Deductions & Tax Credits

Line 21900 Moving Expenses Deduction

How Much Can Be Deducted?

Does the Job Have to be With a New or Existing Employer?

What is an Eligible Relocation for Moving Expenses?

What Moving Expenses Can be Claimed?

Employer-Paid Moving Expenses and Taxable Benefits

Labour Mobility Deduction (LMD) For Tradespeople

Eligible Employed Tradespersons

Eligible Temporary Relocation

Eligible Temporary Relocation Expense

Temporary Relocation Deduction Amount

Medical Expense Tax Credit - Travel or Moving Expenses

Students - Moving Expenses

Line 21900 Moving Expenses Deduction

Income Tax Act s. 62, 248(1)

How Much Can Be Deducted?

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 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:

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.

For more information see Moving Expenses and Relocation Benefits on the Canada Revenue Agency (CRA) website.

Labour Mobility Deduction (LMD) For Tradespeople

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. 

Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.

Eligible Employed Tradespersons

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:

  1. 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,
  2. prior to the relocation, the taxpayer ordinarily resided at a residence in Canada (the ordinary residence),
  3. 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,
  4. during the temporary relocation, the taxpayer temporarily resided at one or more lodgings in Canada (the temporary lodging), and
  5. 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

  1. transportation for one round trip per eligible temporary relocation between the ordinary residence and the temporary lodging,
  2. meals consumed by the taxpayer during the round trip, and
  3. the temporary lodging, if, throughout the period of the taxpayer's temporary relocation,
    1. the taxpayer maintains their ordinary residence as their principal place of residence, and
    2. the ordinary residence remains available for the taxpayer's occupancy and is not rented to any other person

An expense cannot be claimed if:

  1. it is deducted, other than as an eligible temporary relocation expense, in computing the taxpayer's income for any taxation year,
  2. it was deductible by the taxpayer for the immediately preceding taxation year, or
  3. 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:

  1. $4,000,
  2. the total eligible temporary relocation expenses for the taxation year, and
  3. half of the taxpayer's total income for the taxation year from employment as an eligible tradesperson at all temporary work locations.

See Guide T4044 Labour Mobility Deduction on the Canada Revenue Agency (CRA) website.

Medical Expense Tax Credit - Travel or Moving Expenses

The following moving or travel expenses are eligible expenses for the medical expense tax credit (METC):

TaxTips.ca Resources

Students - Moving expenses

Increased rate for meals using simplified method, effective Jan 1, 2020

Canada Revenue Agency (CRA) Resources

Line 21900 - Moving expenses

Form T1-M moving expenses deduction (to be filed with the tax return)

Income Tax Folio S1-F3-C4 Moving expenses

T4044 Employment Expenses - Labour Mobility Deduction (for eligible tradespeople)

Labour Mobility Deduction (LMD) - from Budget 2022

Revised: September 29, 2025